Even if you have healthy money habits, it is a good idea to take a long, hard look at them every once in a while, – such as at the start of a new year.
Working with a budget. Tracking your expenses. Putting money into a savings account. Building up an emergency fund. These are all excellent money habits, but it is possible that your financial routines can become a rut and that every month you do what you did the month before without much thought.
Why not use the start of the new year as an opportunity to look at your money routine with fresh eyes? It will help you to identify habits that must stop, and ways to improve the good ones.
Here are some ideas:
Review your money tools
Is the notebook in which you write down your budget and track your expenses still working for you? Maybe the time has come to upgrade to a spreadsheet or an app. Or if you are already using a few apps, take the time to see if there are newer, smarter options available.
Delve into your debts
You are paying your loan instalments every month, so there’s nothing else to do, right? Wrong. Take a holistic view of your debts to determine, for instance:
• Whether debt consolidation could reduce your total monthly repayment.
• Which of your debts cost you the most in interest, and focus on paying those off first.
• If it is possible to increase your repayments to settle your loans quicker.
Create a new budget
Instead of simply updating your tried and tested budget template with the new month’s numbers, create your budget from scratch. Yes, it may sound like unnecessary effort, but the idea is to take a fresh look at your income and expenses. Drawing up a new budget using your bank and credit card statements as points of departure could show up payments you have forgotten about, or don’t recognise. At the very least, a fresh budget will help you to think about your finances.
Clean out your purse, wallet and/or handbag
Decluttering is a wonderful way to make a fresh start. For instance, have a look at the cards you have:
• Do you use all of them? If not, destroy the ones that might have expired or are for store accounts or loyalty programmes you no longer subscribe to.
• Use the ones you use. This applies specifically to loyalty programmes. Make sure you know how to accumulate rewards and how to redeem them. If the programme costs you money, ie, a monthly fee, make sure that the benefits are worth it.
In addition, throw away bits of paper, broken pens, rumpled tissues and anything else that is cluttering your financial space. Put all the loose change in a savings jar. A tidy purse, wallet or handbag gives your money space to breathe.
Have money conversations
Your money is seldom your business only. When you are a member of a household, the money you earn and spend has an impact on the other people under your roof – and the same applies to their earnings and expenditure. If, as a parent, child, sibling or another relative you take some responsibility for a family member’s wellbeing, your finances and theirs are also linked. And even if you just have a circle of friends with whom you hang out regularly, their spending patterns and financial habits can have a huge impact on your financial wellbeing.
Therefore, a powerful fresh start can be to talk to the people in your life about money. For example, work on a household budget and expense-tracking system with your partner and children, and update the support agreement you have with a relative. As far as friends go, talk to them about your budget for nights out and the financial goals you want to achieve.
Put these five ideas to the test and give your finances the fresh start they deserve.Go back