As we come to the end of 2022, many of us are taking a look back at the previous twelve months and are coming up with resolutions for the twelve months ahead. 2023 presents us with a blank page, ready for fresh starts, better habits and a better quality of life in general. There are various areas you can focus on, but for many of us, 2022 has been a year of financial hardship. Some of us were out of work or out of savings following the coronavirus and Covid-19 pandemic of years past and this has been exacerbated by a cost of living crisis. For a huge percentage of the population, finances are currently something to worry about. Managing family finances may well be a great idea for your 2023 new year’s resolution. Here are some tips that can help to guide this journey!
Budget
Most of us already have a budget. A budget is a tool that we use to determine how much money we bring home each month, what bills we need to pay and how much disposable income we’re left with after forking out for essentials. However, when was the last time you rejigged your budget? The price of many essentials (ranging from housing to food) has increased, so you need to ensure you have a good idea of what your actual disposable income is. Set out all of your monthly outgoings, adapting your budget to cater to increased prices. Effective financial planning is essential now than ever!
Stick to Your Disposable Income
It can be tempting to dip into savings or debt to purchase things you want for your family. But it really is important that you stick to your disposable income. The moment that you start overspending is the moment you take your first steps on a slippery slope to unmanageable debt. Don’t overspend unless it’s a complete emergency, such as an unforeseen vet bill, dental bill or having to replace an essential home appliance.
Borrow Wisely
If you do find yourself in a situation where you need to borrow money, you need to make sure that you’re borrowing wisely. All loans and credit cards are not equal. Each will have different interest rates and repayment terms attached. Browse all your options before settling on the option with the lowest interest rate and most preferable terms attached. There are many comparison sites that can help you with this. You should also make sure that you can realistically pay the sum back without experiencing struggle or hardship.
Clear Debts
If you have existing debts, focus on clearing them. This can lift a weight from your shoulders. If you’re struggling to repay debts, contact the lender and explain. They may be able to pause your interest or scrap some of the debt. You should dedicate as much of your disposable income as possible to clearing your debt. This will help it shrink faster.
These are just a few starter steps that can get your journey to financial security started out on the right foot. Hopefully, some of the advice will help you along the way!