Kick start the New Year with a healthy balance sheet and relaxed mind.
At this time of year, most people plan on either shedding a few pounds or saving a few pounds. It probably comes as no surprise that physical fitness and financial wellbeing are connected.
Does a lack of sleep and restlessness sound familiar? Or perhaps your eating habits are erratic when you’re stressed? We’ve all been there and when the bank balance is down unhealthy habits usually resurface. So what steps can be taken to ensure the New Year is as balanced as possible?
Create a Budget
The key to establishing a realistic budget is having a clear understanding of what money is left over once all of the bills and outgoings have been paid.
There’s no point creating goals until you know how much money there is likely to be left over once everything is paid otherwise it’s too easy to spend more than what you save.
|According to the Office of National Statistics, the average weekly household expenditure in the UK was £572.60 in the financial year ending 2018; the highest weekly spend since the financial year ending 2005, after adjusting for inflation.|
Transport was the category with the highest average weekly spend of £80.80, equivalent to 14% of households’ average total weekly household expenditure.
Households with heads aged 50 to 74 years spent almost a quarter of their housing expenditure costs on alterations and improvements.
Average weekly household spending was the highest in London and the South East (over £650), whilst spending in the North East was the lowest, approximately £200 less.
Households with heads aged under 30 years and those in Northern Ireland spent the most on takeaway meals eaten at home, £7.80 and £8.60 respectively.
Households’ average weekly spend on alcoholic drinks away from the home was less in the financial year ending 2018 (£8.00) compared with 10 years ago (£10.90), after adjusting for inflation.
Households in London spent the most on alcoholic drinks away from home, spending an average of £9.30 a week.*
There isn’t much point in saving cash for that once in a lifetime holiday/brand new house in the country, if you’re up to your neck in debt. Nobody is claiming it’s an easy task but take the debt into account when creating a budget and get it paid off as soon as realistically possible. It’s pretty much downhill after that as any spare cash will yours for the taking and the savings pot will soon start to grow.
This is probably the most difficult and time-consuming thing to do but it will be worth it in the long-term. Delve into the mounds of past paperwork to assess if all of the important stuff is up-to-date and still meets your needs. Is the current supplier of gas and electricity still the most affordable? Does your insurance policy cover everything you/your business requires at this time? Is it plausible to switch bank accounts and gain a little financial reward by doing so?
Plan Your Goals
Anyone eager to get physically fit usually start out with a realistic set of goals and it is important to do the same with the financial aspects of our lives. If the goal is to save money, what is the money for? It’s important to specify why you want the extra money as it will motivate you to stay on track. It’s also important to share your goals with your friends or colleagues who can help keep you on track and keep you accountable. Is this a short-term goal or a long-term goal? What can you realistically afford to save each month without dipping into it when you’re running low on cash? Creating realistic goals is the key to staying on track…so be real with yourself.
Until you’re firmly in the habit of saving regularly it can be really tempting to cave in and spend on the lot so it’s important to celebrate your achievements and treat yourself once in a while. A little reward can help motivate you to stay on track as your piggy bank gets fatter.