AD| It’s that time of year again when we all make resolutions to improve our lives in the coming year. If you’re big on resolutions, you’ve probably set some financial goals for 2023. Whether it’s getting out of debt, building an emergency fund, or buying a house, setting financial resolutions can be a great way to stay on track and reach your goals. It can be tricky to know where to start. About two years ago I changed the way I thought about money. Now I track, save, invest and overpay my mortgage.
I know it can be difficult to get started, especially if you bury your head in the sand about money so I’ve put together some tips and tricks to help you get started on your financial resolutions for 2023. We’ll discuss creating a budget, setting realistic goals, and tracking your progress to ensure you stay on track. With our help, you can make 2023 your most financially successful year yet!
Why set financial resolutions?
Financial resolutions are goals that are aimed at improving your finances in some way. They can be short-term or long-term goals that help you better manage your money and make informed financial decisions. Setting financial resolutions can help you focus on improving specific areas of your finances that you want to work on. It can also be a great way to track your progress and make sure you’re staying on track with your financial goals. Whether you’re trying to get out of debt or save up for a house, setting financial resolutions can help you get there.
Creating a budget
Budgeting is one of the best ways to stay on track with your financial goals. It allows you to look at your expenses and income, and see where you can make adjustments in order to reach your goals. Budgeting can be a challenge, but once you get into the habit of it, it can become second nature – especially as you will start to understand how much you are spending and your regular payments each month. It gets much easier the more you understand your finances.
While budgets vary depending on what you’re trying to accomplish, there are a few things that are essential in every budget:
Your income: Whether you’re working a 9-5 or have another source of income, it’s important to track how much money you’re bringing in each month.
Your expenses: Whether they’re fixed or variable expenses, make sure you know what your outgoings are so you can see where you can make cuts to save more money each month.
Savings and debt repayment: Whether you’re trying to build an emergency fund or pay off debt, it’s important to track how much you’re putting towards savings and debt repayments each month.
Investments: If you’re investing for retirement or for a child’s education, track how much you’re putting away each month.
Taxes: If you’re in a position where you need to pay taxes (hello self-employed friends!), keep a track of how much this will be and start putting money away each month for it.
Setting realistic goals
When setting financial resolutions, it’s important to set realistic goals that are achievable. If you’ve never saved money before, it’s not realistic to save £5000 in one month. Instead, it’s better to break that goal down into smaller, more manageable goals. For example, you could set a goal to save £100 (or even just £10 if it’s all you can manage) every month.
While this amount may seem small, it’s much more achievable. If you’re trying to get out of debt, it’s important to set realistic goals that are tailored to your specific situation.
If you have a lot of debt with high interest, it might be better to pay your debt off first before saving for an emergency fund to limit how much interest your pay on your debt. Instead of an emergency fund, you could look into a bank account with overdraft so at least you have access to money if you absolutely need it for an unplanned expense.
The importance of tracking progress
Keeping track of your progress can help you stay on track with your financial resolutions. It allows you to reflect on your past progress, learn from your mistakes, and make adjustments as needed. While there are lots of ways to track your progress, a financial tracking spreadsheet is a great way to keep all of your finances in one place. It allows you to track all of your finances in one place, and easily see how your progress is going over the course of the year.
Tracking your progress is essential for financial resolutions that involve paying off debt. This can be especially helpful with larger debts such as a mortgage or student loans. It can be difficult to keep track of these large debts, but they’re essential to pay off as quickly as possible.
I have a free financial planner that you can download here.
Strategies for saving for a house
If you’re saving for a house, there are a few key strategies you can implement to help you reach your goal sooner. These include:
Saving as much as possible: This is the most important thing you can do when saving for a house. The best way to save money is to earn more money, so take on additional side hustles and freelance work if you can. Take a look at what you spend and see what you can do without. For example, if you buy a coffee from costa every morning, make one at home and use a flask instead. If you haven’t watched Netflix in weeks, cancel it – you can always subscribe again for a month or two if there’s something you want to watch.
Prioritising your debt: Before you start saving for a house, you need to pay off any debt you have. This can include credit card debt or student loan debt. Making overpayments on your debt will reduce the interest you pay and save you money in the long term. Just check there are no early repayment fees on any loans.
Saving for retirement
The first thing you need to do is check that you’ve made the full amount of NI contributions to get a full state pension.
Then have a think about your company pension. If your company has a pension scheme, then do you contribute the maximum amount? A lot of companies will match your contribution up to a certain % of your wage.
You may want to take out a private pension if you don’t have a company one. I use PensionBee which I can manage from the phone app. It allows me to quickly see how much I’ve got in there and the government gives me 25% of whatever I contribute.
Staying motivated throughout the year
No matter what financial resolution you’re trying to achieve, it can be tough to stay motivated throughout the year. It’s important to keep yourself accountable throughout the year by checking in on your progress and staying on track with your goals. This can help you stay motivated and on track with your resolutions. If your resolution involves a specific amount of money, it’s also a good idea to set a deadline. This can help motivate you to reach your goal faster. If you’re struggling with staying motivated while working towards your goals, try finding an accountability partner. This can help keep you on track and motivated towards your resolutions.
Financial planning apps
There are financial planning apps that can help you track your progress towards your financial goals. They allow you to input your financial information, such as your income and expenses, and see how it affects your financial goals. This can help you stay on track with your goals, and see how your progress is going over the course of the year.