Budgeting doesn’t have to be as scary as you think. It requires a bit of planning, but will result in you achieving some sort of financial peace of mind
When considering your personal finances, do you feel like you’re stuck in a maze? Does it feel like your paycheque disappears before you know what you’re going to do with it? You might feel that there is no way of putting money away to help you reach your financial goals. It can become a vicious cycle, and over time it can leave you in a bad financial position. These problems are worsened by the current state of the economic environment including the rising costs of living which shrinks the pockets of individuals.
So, how do you get out of your very own financial maze and avoid the impacts of inflation?
Budgeting and smart money allocation is the answer. Implementing these two strategies will allow you to review your finances and build a clear roadmap.
Step one is to build your own personal finance budget. Start by tracking your income and expenses by noting all the ins and outs of your bank accounts over the last few pay periods. Next you can evaluate your income sources and investigate where your money is being spent. By highlighting areas where you might be wasting money, you can create opportunities.
Next, it’s key that you put a plan in place for how how you will spend your money going forward. Allocate money to fixed and variable necessary or unnecessary expenses to ensure you have accounted for all possible outgoings. As part of the planning stage, it’s important to allocate a portion of your money for financial planning. This can be done by reviewing your current needs and objectives to highlight your priorities. Once you’ve highlighted your priorities, you can use our smart money allocation checklist to ensure your using your money wisely.
Financial Check List
- Protection Policies: Pay for the likes of life & specified illness cover and salary protection to cover the loss of income to you and your family in the event of death, illness or injury.
- Save: We recommend you save regularly to build an emergency fund which may be needed to cover an unexpected cost or loss of income in the short term.
- Short Term: Add money to a deposit account for short term financial requirements which may arise within the next 5 years such as a deposit for a house, a new car or education costs.
- Medium Term: Invest in regular savings plan to grow your money for medium term financial requirements which may arise in the next 5-15 years such as family events or college costs.
- Long Term: Contribute to a pension for your retirement planning strategy for the long term to help you potentially retire early and or have a good life in retirement.
Plan For The Future
The list above is ranked in order of general priority as the focus should always be on protecting the present and then planning for the future. As part of your budget planning stage, you would have determined the amount of money available to you for such plans and then allocate portions to each of the above areas. By allocating your money to these areas you will be making smart decisions with your money which will lead to financial peace of mind.
To start building your roadmap out of the personal finance maze, contact us and we will put you in touch with the most suitable Financial Adviser for you.