As the temperature starts to warm up, it’s a popular time to dust off the cobwebs and give the house a thorough spring clean. But what about your finances? Revisiting your financial goals, making changes to ensure you are on the right track, and checking in on your household budget is a great exercise to do on a regular basis.
Here are our top four financial spring-cleaning tips to get on top of your finances:
1. Set realistic financial goals – and write them down
Research from the Dominican University of California* suggests that people who write down their goals are 42% more likely to achieve them than those that don’t. The research also shows that sharing your goals with another person may increase your chances of success further still.
What are you waiting for? Grab a pen and paper and get started!
If you find goal-setting difficult, try breaking it down into smaller chunks:
Keep this on hand and revisit regularly so you can track and keep on top of your goals. Make sure you tick off your small wins as you go – it’s always good motivation seeing what you’ve achieved.
2. Review your expenditure
Going over your expenses with a fine-toothed comb is a very important exercise to know exactly where your hard-earned dollars are going. Look out for unnecessary subscriptions that no longer serve your needs and identify areas where you could you cut down and save.
Of course, life is also about enjoyment. While living within your means is important, so is doing the things you enjoy – such as going out for a nice meal. Marie Kondo’s now famous advice on decluttering is to assess whether or not something ‘sparks joy’ for you or whether you should let it go. Cull the unnecessary expenses!
3. Create a budget
Budgeting is not a one-size-fits-all exercise and the best type of budget is one you use and stick to. If detailed spreadsheets aren’t for you, try:
4. Prepare for the unexpected
If 2020 has taught us anything, it is that the unexpected can happen at any time. It is crucial to ensure that you have a ‘safety net’ in place in case of any unforeseen events, such as sudden job loss or illness.
This is a good topic to discuss in greater detail with a financial planner, but here are two simple ways to get started:
Visit P&N Bank’s website to find out more about our insurance services.
The start of spring is a great excuse to clean up your finances and get some good habits in place but, like all good habits, the key is consistency. Make a promise to yourself to regularly review your goals, budget and spending and you will find yourself on the right track to a better financial future.
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