Updated: September 28, 2012
We’re halfway through the first month of 2012. So how’s your budget coming?
Have you paid yourself after receiving your first salary for the year? Were you able to track your expenses from the past two weeks?
I hope your resolve to make your finances better this year is going nice and smooth for you.
If not, then maybe our guest blogger for today, Michael, will be able to offer you a few tips.
Let’s read what he has to share:
Christmas and the New Year tend to take their toll on our finances, after we’ve likely spent a bit more than we planned to and perhaps borrowed some extra cash to cover the cost. However, the start of a new year is a perfect time to get your finances into shape, and ensure that your money is on track for 2012.
Here are some helpful, easy-to-follow tips to help you make sure your finances are fighting fit for the year ahead.
Make a budget that works
When it comes to your money, it’s important to take a realistic approach: like all New Year’s resolutions, there’s no real point in making them if you won’t be able to stick to them.
Your finances are no different – making practical changes that will really improve things in the long run is much wiser than choosing a ‘quick fix’ that has little impact because it’s just not practical.
Work out all the money you have available to spend every month. Doing some research into various benefits could really pay off: you may be missing out on Government assistance for things such as childcare. Then work out all your essential costs and anything you regularly spend money on: from your gas & electricity bills and rent/mortgage, to clothes for the kids and transport.
Once you’ve deducted your essential expenditure from your income, whatever you’re left with should go towards repaying your unsecured debts, savings and any non-essential spending from month to month.
Simplify your finances
The beginning of the year is an ideal time to review your finances and decide what should stay and what should go.
For example, if you have a gym membership you never use – and you’re pretty sure you’re not going to – or a digital TV package that is going to waste, take the plunge and cancel them: ‘freeing up’ some money could make a welcome difference to your budget.
If you have several debts you’re still repaying from last year, and you’re generally keeping on top of them well, you may find that taking out a debt consolidation loan could make keeping on top of your debts simpler – with just one payment to one lender per month.
Plan your financial goals
Decide what your financial goals for 2012 are. A family holiday? Music lessons for the kids? A new plasma screen TV? A new car? Whatever your financial ‘wishlist’ for the year ahead contains, bearing these things in mind could help to motivate you to regularly put money into a savings pot – so this could be the year your financial ambitions become a reality!
This guest post is contributed by Michael Smith, a banker from Denver and an avid reader of Ready To Be Rich.
I have reconstructed my thinking to live within a certain budget. I have set monthly time frames to get through. I am intent on tackling my debt first then on to building. I will kill the smallest debt first. That same payment I used to kill the smallest debt will be then alloted to the next smallest debt I have. And on and on until I am debt free. At that time I will reward my family with a nice trip or something similar.
Love the ideas on starting the New Year off right. I believe that many people start to think “I am already in debt…what does it matter?”. When someone starts to think that..you know they are going down the wrong road. Anyone can start over and begin the road to financial freedom. The New Year is a great place to start!