When it comes to finances, a lot of people have good intentions, but struggle when it comes to following the practices that are necessary to ensure good stability and comfort. It’s not surprising that finances are so difficult to handle when you consider the fact that the price of everyday living expenses continues to go up, as wages and other income numbers consistently fall down.
It can quickly become overwhelming for anyone to keep track of their spending habits in today’s fast-paced world. Fortunately, if your New Year’s resolution is to become better at handling your cash, we might just have a few tips that could help you to overcome your money woes. Just in time for the new year, we’ll be looking at 6 finance tips you should live by in 2018.
Always Stick to Your Budget
Do you have problems living within your means? Then now’s the time to start planning a budget. Knowing exactly how much you have to spend on a monthly basis is one of the easiest ways to start managing your money. The good news is that planning a budget doesn’t have to be a difficult experience, you can basically set up whatever strategy works best for you.
If you have a good idea of what your financial year looks like, you might consider creating a financial calendar that’s designed to help you keep track of when you have money coming in, and when it’s going out. This way, you’re less likely to be shocked when you spend out on an essential bill.
Know Your Net Worth
Part of understanding how financially stable you are as a person is looking into your net worth. Basically, your net worth is the number of assets you have, then subtract the debt you’re looking at. Sometimes, knowing your net worth will help you to understand how well you’re doing financially. Don’t panic too much if you’re in the minuses – particularly if you have a mortgage.
Once you have your net worth in mind, you can begin to create SMART goals for your future. This means designing ambitions that are specific, measurable, attainable, focused on results, and bound by time. Make sure you know exactly what you want to achieve and when in regard to money.
Understand How Your Bank Accounts Work
A great way to keep on top of your spending is to make sure you know exactly what you get out of your bank accounts. Regardless of what kind of bank you have, most are currently offering online features, so you should look into those and see if there’s anything available that might help you to manage your finances. For instance, you could download an app that helps you to keep track of your spending.
When you put your money into a savings account, make sure that you do everything you can to avoid touching it. Your savings account and current account shouldn’t be the same thing. Instead, you should look at saving as a way of paying your future self.
Understand the Meaning of a Financial Emergency
When you’re facing a financial emergency, there are solutions out there that can make handling that issue much easier for you. For instance, you could tap into a loan to help you spread the cost of a big expense out over a few months. However, before you start looking for lending opportunities, make sure you know what a financial emergency really is.
Buying a last-minute gift for a friend or splurging on some luxury items can’t necessarily be seen as an emergency. Instead, you should be looking at emergencies in terms of house problems, unplanned car repairs, and other things that you can’t afford not to pay out for.
Live Below your Means
While this might not be advice designed specifically for savers and budgeters in 2018, it’s something that everyone who wants to keep control of their cash should keep in mind. Living below your means can help you to accomplish a wide range of other financial goals, and it also makes it easier for you to accomplish great things.
While you’re living below your means, remember that you can always update your budget every time something significant happens in your life – like when you get a pay rise for instance.
Plan for the Future Early
Finally, it’s easy to think of things like retirement as something that exists somewhere a long way in the future, but the truth is that the years pass by quicker than you might think. Make sure that you’re prepared by starting your financial planning for retirement as early as possible. Remember, the more time you have to save, the more of a nest egg you’ll have to fall back on when you want to enjoy your golden years.