New Year, New Budget – Meeting Your Financial Goals for 2016, lets get started. What would you really like to accomplish in this New Year? Finally taking that trip to Europe you’ve been talking about for years? Trading in that aging rust bucket of a car in your driveway for a nice shiny new model? Or simply just not having to end every month with a zero balance and a small pile of bills still outstanding? Whatever your financial goals for 2016 revamping your budget and creating a new one for the new year is a great way to start, and it is not even as difficult or time-consuming as you might imagine.
Know Your Real Worth
OK, so you know how much you earn every month but do you know how much you are actually worth? In order to create a good, workable budget, you need to begin with determining what your assets really are. Begin by asking yourself the following questions:
Are your paycheques the same every month, or so variables like overtime pay come into the equation? If so, how often is that likely to happen over the course of the year?
- Do you have stocks, bonds or similar financial instruments that are earning interest for you?
- What are the average balances in your checking, savings and/or money market accounts?
- How much equity do you have built up in your home?
Understand Your Monthly Expenses
Once you have determined what is coming in every month it’s time to take a long hard look at just what is going out too.
- How much do you spend on ‘basics’ like food and petrol every month?
- How much are you paying on loans (all of them, including credit cards)?
- How much are you paying for insurance – car, home, life, health – every month?
- What ‘ automatic’ monthly member dues do you pay to a gym or to a subscription service?
- What are your ‘luxury’ expenses, things like dinners out, trips to the cinema, etc?
- How much would you be comfortable adding to an ’emergency fund’ every month?
- How much do you need to save every month to get that holiday/car/ a little bit of ‘pocket cash?
New Year, New Budget – Meeting Your Financial Goals for 2016
Trim the Fat
OK, now comes the hard part. It’s time to look at your outgoings and see where savings could be made in order to help you meet your financial goals. This is where you have to ask yourself some hard questions like these:
- Do you really need to eat out as often? Or stop by the coffee shop every morning instead of brewing up a flask of coffee at home?
- Could you get a better deal on your insurance coverages by switching policies/companies?
- Do you really need all of those monthly subscriptions or are you just paying them out of habit? Do you really go to the gym anyway or could you just as easily work out closer to home?
- Would it kill you to spend a few hours a month clipping coupons so you could save a bit more at the supermarket? Do you really need to opt for name brand everything instead of opting for the off-label or generic store brands?
Set Your Goals
Now that you have a far clearer idea of your real finances you can sit down and create a formal budget, one that includes those savings plans that are going to help you achieve the big goal for the year. And don’t just leave it sitting as an unseen file on your computer. Print it out and place it somewhere prominent – the refrigerator perhaps – so that it can be seen as a daily reminder of what you are working towards. New Year, New Budget – Meeting Your Financial Goals for 2016 is easy when you know how, want some advice? speak to one of our professional advisers now on 031 267 5060