The new year is the perfect time to take stock of where you’re going in both the long and short term. Here are our top tips to help you plan your finances for next month, next year and beyond.
Don’t be afraid to think big
Right now you’re probably busy thinking about how to get your finances back on track after Christmas, but don’t forget to consider your long term goals too. Retirement may seem a long way off now, but it’s never too early to start planning. To help you get started with goals you could start by asking yourself a few questions: Where do you want to be in a year’s time? How about a decade? 30 years? Thinking about the lifestyle you want can be the first step towards achieving it.
Don’t neglect the here and now
Your everyday spending is just as important as your over-arching plan; keeping on top of your budget will help you to build your financial health and make progress towards your long term goals. Make sure your budget is realistic, and allows you to contribute to your goals and rainy day savings as well as covering your essentials.
Although you need to be disciplined in your budgeting, it’s important not to be too rigid. After a few months of budgeting you may notice that you’ve allocated to spend too much in one category or not enough in another, so adjust it as you go along to make sure it’s working for you, or otherwise adjust your expenditure to fit in with your spending. Your long term plan can also be open to adjustment where necessary; unexpected life events could occur that throw you off by a year or two!
Expect the unexpected
It may be unpleasant to think about, but preparing for the worst can be an important step to help secure your financial future- depending, of course, on your circumstances. You may want check out our guide to protection insurance for options that may be suitable for you. Writing a will can also be an important step towards planning for the future, helping to ensure that your assets are divided up as you wish when you pass away.
As well as wills and insurance, you may want to consider setting aside a rainy day fund- you never know when the boiler will break or the roof will fall in! The equivalent to three months’ worth of salary is typically considered a good minimum level of rainy, but what’s right for you will depend on your circumstances and commitments.
By keeping an eye on your day to day finances as well as your long term goals, you can build towards a stronger and successful financial future for you and your family.