Planning 2016 finances doesn’t have to take a toll on you; all you need is good planning to get the job done correctly. Whether you are a spender or a saver, you need to plan your 2016 in a way that makes sure that money doesn’t become a problem for you. Here are our top tips on how you can plan your finances for 2016:
#1 – Spend time analysing your finances
Even if you are a spender, you can teach yourself to analyse your finances. You need to look at your daily and monthly spending. Are you the kind of person who spends money on daily coffee drinks? Are you the kind of person who likes to go out and eat all of the time? You need to know the answers to your personal finance questions in order to manage your finances. You can spend a few hours a week or you can even spend several hours over a weekend to manage your personal finances. You can analyse your finances with spreadsheets by making detailed entries of what you spend every day, week and month. By analysing your spending patterns, you will be able to see where you can make improvements for 2016.
#2 – Make a plan to pay off your debt
You need to have a solid plan if you plan on paying off all of your debt in 2016, or at least some of it. First of all, know what type of debt that you want to tackle. Consumer debt such as credit cards and loans is easier to pay off than mortgages because the latter takes many years to finally pay off. Consumer debt comes in all forms and packages, and it requires a focused attentive eye to detail to avoid you falling behind on making your payments. Debt repayments should be organised in a calendar or financial notebook so that you don’t forget the payments you need to make. Avoid getting behind on debt repayments in order to keep 2016 financially solid.
#3 – Have an emergency fund
You never know when you will need to have an emergency fund. This is generally classed as a cash fund that is liquid that you can access at any time. It should be about three months’ savings. In case you lose your job or you have a personal problem that occurs, you can tap into this fund only for emergencies.
Personal finance experts prefer having an emergency fund instead of a credit card for emergencies because it decreases the amount of unnecessary debt that you can have. Emergency funds can be difficult to get up and running but all it will require you to do is to put money aside instead of spending it on things that you don’t need.
One of the first things that you can do save for an emergency fund is save 10% of your income each month without fail, and cut down on excessive spending on restaurants, drinking and going out.
#4 – Make a general budget
Most people don’t live according to a strict budget and this is where financial stress and hardship can manifest itself. You need to create a general budget that you can follow so that you can make 2016 a year of strong finances. Budgeting includes looking at how you much receive versus how much you spend.
Tightening expenses is easier if you are single compared to being in a family setting. Whatever your financial profile, you should have a budget that is razor-sharp and that allows you to live without depriving yourself. Fixed costs in a personal finance budget include bills such as gas & electric, groceries and your mobile phone bill. Non-essentials such as going out can be tweaked so that your budget doesn’t become too tight. If you do find yourself in some financial difficulty before payday, a payday loan is a short-term solution that can help you fix your budget before you receive your salary.
#5 – Avoid unnecessary fees
You don’t need to pay late payment fees for debts if you are on budget and if you are managing your finances correctly. Late payment fees on credit cards are just one example of unnecessary fees that you don’t need to pay if you are staying on top of your finances.
Instead of losing your money by paying these unnecessary fees, just avoid them all together by making sure that you repay all of your debts on time.
#6 – Cut down on impulse purchases
If you are a spender, you know that impulse shopping is something that many people experience. Impulse shopping is explained as buying a product that you have not necessarily budgeted or planned for. If you are an impulse shopper, make 2016 the year where you only shop for products that you have made proper planning for.
#7 – Keep the number of loans you have to a minimum
2016 should be the year where you keep the number of loans you have to a manageable number. One reason why some people in the UK face financial problems is because they have over-extended themselves with consumer loans. You should only take out loans that you know that you can repay and only take out loans that you know are manageable with their repayment requirements.
#8 – Consider an accountant
If you have a lot of financial transactions or you are running a growing business, a good financial move can be to hire an accountant who can help you get to grips with your finances. Accountants are for people who complete plenty of financial transactions in a month or every few months, and they are ideal for entrepreneurs who want to manage their personal and business money effectively.
With these top tips, 2016 can be the year that you take total control of your finances so that you can achieve your goals and dreams.