Having a plan for your finances in 2016 is essential to make the most of your money. If you want to maximise your wealth and have more money each month, here are five simple steps that can safeguard your income.
1. Set Financial Goals
If 2016 is going to be a prosperous year for you, you need to start it with a clear financial plan. Work out what your key saving, spending and investment goals are for the next twelve months, and get a clear and compelling picture of what you would like to achieve.
Are you looking to clear debt, save for a child’s university education or invest in a pension? If you get the goal setting stage of your financial plan right, the rest should be quite straight forward.
2. Spending Audit
For many, this is one of the most challenging parts of becoming more financially fit.
Carrying out an audit of your family finance requires you to be brutally honest about where your money goes, and what you are spending it on.
When you list what is essential expenditure and what is not, a picture quickly emerges which will help you to make savings.
3. Money Diet
The words ‘diet’ and ‘January’ are virtually synonymous with one another.
After Christmas we tend to go on a physical health kick, and you can carry out a financial one at the same time.
The results of your spending audit should give your a clue as to where you can cut back on unnecessary spending and improve your money management.
Every pound that you stop yourself from frittering away can be directed towards your financial goals.
4. Lazy Investments
Just as you can’t afford to waste money on unnecessary expenses, you also cannot afford to waste time on inefficient or ‘lazy’ investments.
It might be time to review the performance of any investments you have, to see how much they have appreciated annually, and to consider changing those investments that underperform.
It would be worth at this point seeking a professional opinion from financial advisers.
5. Get Rid Of Debt
One of the top priorities for many people in the coming year will be to continue paying off debt.
Personal loans, credit card debt, store cards and hire purchase agreements will burn a hole in your personal wealth for as long as you have them.
You may wish to consider working out which loan or card has the highest interest rate or costs you the most in monthly repayments, and then committing as much money as possible to paying it off first, then move on to the next one, leaving the Leave lowest interest loans until last as they will be the cheapest debt to repay.
If you would like to master your finances in 2016, why not book a financial review now.