For many people, the New Year brings the chance to improve or change, which can mean adjusting your lifestyle or adopting a new attitude.
The same can be said for the new financial year – the prospect of a new 12 months to change the way you think about finances and make changes to improve your funds can be quite exciting.
In this post, you can read a few tips on how to manage your finances for the new financial year and create the steps to make your own financial resolutions.
1. Look Back At Your Finances
It is a good idea to look back before going forward.
Review your past spending by collecting bills, bank statements, and receipts and combing through each one to highlight any areas of unnecessary spending.
Once you are aware of any areas for improvement, they can be a lot easier to fix over the coming months.
2. Evaluate Your Current Position
As well as looking at your past spending, it is essential to evaluate your current position.
Review your credit rating and make any improvements to it where you can. Consider merging your debts together with consolidation loans for bad credit to make them more manageable going into the new financial year.
Assess how much you have in your savings and spot any areas in your budget that would allow you to build on this amount.
3. Plan Your Finances
One of the reasons why many financial resolutions fail is because people set unreasonable goals instead of manageable, reasonable targets.
Thinking about ‘SMART’ goals can help to give you direction towards your financial aspirations and make your goals more achievable. ‘SMART’ goals are:
- Specific – do not be sweeping with your goals, such as ‘save money’ or ‘reduce debt’. Instead, you should thoroughly analyze your finances and target specific areas that could boost your chances of reaching your financial goals.
- Measurable – by having measurable goals, you can set yourself benchmarks to track your progress. These should also be slightly flexible, so you can make changes as necessary.
- Attainable – set yourself attainable goals to help you keep your confidence up as you get closer to achieving the final target.
- Relevant – to help you avoid wasting time, you should ensure that your goals are relevant and appropriate to what you are trying to achieve.
- Time Sensitive – if you know when you want to achieve your goal, this can allow you to pace your savings and ensure that you set the correct amount of money aside each month.
4. Adopt Automation
Automation is a huge part of personal finances and you should aim to automate as much as possible. This includes setting up direct debits for bill payments and automatic transfers to your savings account each month.
Many banks and bill providers offer automation, and you may find that you receive better deals for setting up direct debits. By automating as much of your finances as possible, you will not need to worry about moving money yourself, leaving you more time to investigate investing and saving.
There are a variety of ways that you can prepare yourself for a new financial year, but taking these initial steps can put you in a strong position to take the next 12 months on.
If you need more help with your finances, please seek impartial support from the Money Advice Service.