As another year draws to a close, now is the time to start thinking of how you want to start managing your spending in 2019. Planning what new practices to adopt now means you won’t have to think about it over Christmas, and won’t end up rushing into unrealistic and unmanageable new year resolutions. And of course, the easier you make things for yourself, the easier your good habits will be to keep! Here are John Lowe The Money Doctor’s five simple tips to transform your finances :
- Be smart with your spending
Ask yourself before every purchase: do I really need this? Perhaps too late for Black Friday or Cyber Monday but not for the myriad of pre-Christmas sales, it can be so easy to see things as deals that may indeed be cheaper than they would be otherwise – but that doesn’t make it a good decision! Try to make lists in advance of any sales, so that you know what you really need – rather than what you’re just tempted to buy. Impulse is bad for your pocket. For big-ticket items, like DIY tools, think about borrowing them from family or neighbours; or for subscriptions like gym memberships, set yourself a goal of working out at home for a month or two as a trial first. If you can’t get up off the couch to go for a walk, maybe it’s not worth shelling out for a gym membership you won’t use.
- Familiarise yourself with your bank account
If your bank has an app – which they all should ! – download it. It’s important to get to know when direct debits are going out and when your wages come in, so that you can determine if anything is awry. This is of particular importance if you have a credit card, as scammers can often make small, repeated charges to your account that you wouldn’t notice on a day-to-day basis. Try not to put it off and make it a chore – you can check quickly on the commute to work, at lunch or before you go to bed. Two hours a month – that’s what YOU should be spending on your finances every month.
- Track your spending
Keep your receipts for everything you buy. Big, small, one-off or regular spending: it all adds up. If paper feels like a messy option, try an app like Money Doctor which tracks your spending – it’s free too. Money Lover is another free app you can use for tracking your spending. You can use it to record everything from daily purchases to medical, household, motor and travel expenditure and then review all your expenses in one place. You can even separate out business and personal expenditure while with the Money Doctor app you can also record geographically WHERE you spent every single cent.
- Get thrifty at home
Getting organised in your home is one of the most reliable ways to curb your spending. The weekly shop can quickly turn into an exercise in throwing all the usuals into your trolley – but that’s a quick way to end up over-stocking. We all have that cupboard or freezer drawer in our house with tins, packets and sauces at the back, that are forgotten until they’re cleared out in the spring clean. Take inventory and make sure you know what you need before you start shopping.
The irony of the wife hiding her shopping bags in the wardrobe and the husband pretending he’s at work while he’s on the golf course is long outdated. Talk to your partner about what you’ve each spent or are planning to spend; if one of you is responsible for the finances, make sure you’re still asking questions and communicating your concerns or desires. Clarity is key!
Kick off 2019 with these five simple steps and I promise it will make a difference!