December and January play havoc with our budgeting. On top of the traditional Christmas present giving, there’s a slew of events to attend – meaning forking out the cash for dinners, champagne bottles, and new dresses (because let’s face it, you want to be looking top of your game during this prime party season).
Come February, our bank accounts are beginning to suffer the dreaded financial hangover. Navigating us through the headache, Celebrity Finance Expert Anthony Bell reveals six key ways to have your budgets back on track.
With 2017 well and truly upon us now and like many Australians, we set out to ensure that this year is the year we finally make inroads on setting up ourselves and our families on a road to financial stability. With many Australians loving to travel over the Christmas and New Year break, many of us come back to a larger than expected debt (or some would say, expected) after overlooking our holiday budget. Here are a few tips on paying off your holiday debt as quickly as possible.
1. Stop Borrowing Money
The best way to pay off your debt is to ensure that you don’t find yourself deeper into more debt. Now’s the time to rein in your spending and only buy what you need with money you have. Get your spending back on track and create healthier financial habits around spending. Just as many people adopt new diets and exercise regimens in the new year, try out a cash only diet to reboot your finances.
2. Align Your Family Financial Goals
Just like in sport, a well drilled and disciplined team is more likely to enjoy success as they are aligned in their visions and goals. Many a yearly plan has failed when a couple’s goals and financial disciplines are not aligned; which leads me to my next point.
3. Set Goals and Budgets
In order to achieve your financial goals, you must first work out exactly what your goals actually are and then prepare a budget to help you achieve them. When preparing your plan, visualise what you want the end to look like and work backwards from there. It can be useful to keep thinking about your family as a business. Businesses keep a record of their income and expenditure so that they know where their money is coming from and what it is being spent on. If a business owner doesn’t know this vital information about what’s happening now in their business, how can he/she possibly create a proper plan for the future? The same logic applies to your family too. The budget will also allow you to determine how much available funds you will have to throw at your debt.
Financial goal setting can be hard to know where to draw the mark. Set goals that will stretch the family but are still achievable. Too easy and you won’t have maximised your potential and too hard and inevitable disappointment will result.
Being realistic is important too. As a simple example, there’s no point budgeting that you’ll bring lunch from home when that’s just not going to happen.
It’s the actual process and discipline of examining your expenditure patterns that is often the best way of driving changes in your spending behaviour in the future. It opens your eyes, makes you think and you’re more likely to make better, more informed decisions of how and on what you will spend your money.
5. Short term goals
NASA didn’t get to the moon by just its overall goal, as audacious as it was at the time. It was a series of short term goals that could be measured and tracked that ultimately got the job done.
The same applies to us as individuals. We might have a goal for the year but we must have much shorter term goals, no longer than 90 days, that will inspire us and help us to keep on track for the full year.
6. Long term plan
A financial goal for the year is absolutely the right thing to do, but it must be set in the context of a long term financial plan. There’s no point having goals for the year that are not aligned to your longer term plan. If you don’t have one, seek assistance from a licensed financial planner.
For a full list of his services, visit www.bellpartners.com