12 financial management tips for 2012

WHILE the festive season is a time to treat, pamper and spend, the start of a brand new year is a good time to bring in new resolutions.

Managing your money more efficiently can be one of the best New Year resolutions to make, and there are several simple practices you can do to acquire money management skills and improve your financial situation.

Follow cashy’s 12 top tips to help you manage your finances in 2012…

1. Review your personal finances

This is not as challenging as it sounds. With the expense of Christmas behind you, take the time to go through your December receipts so you can account for all your expenses and income. Once you have done this, it’s time to turn over a new leaf.

2. Manage your debt

If you’re beginning to worry about mounting festive debts, the New Year is the perfect time to take action.

Try consolidating all your debts into one loan: you will have only one monthly payment and will save the risk of various interest charges building up.

3. Make money management easy

Separate your money into different accounts for different purposes. For example, it can be useful to have one account for savings and one account for monthly outgoings so you don’t keep eating into your savings to pay for your bills. This will make it simple for you to keep track of your saving and payment funds.

4. Keep track of spending

Use a debit card instead of credit cards for the majority of your expenses. Debit cards are the easiest way to keep a close eye on your expenditures, allowing you to only spend what you have in your bank account.

5. Start budgeting

Setting up a budget is very simple, but extremely effective. Begin by breaking down your expenses and monitoring your income and outgoings. Remember to always allow for a contingency fund for those unexpected outgoings.

Budgets do not have to be complicated; they can be as simple as making a list of your expenses then prioritising into order of importance to ensure you can cut back on those unnecessary outgoings.

6. Treat yourself

Budgeting can be tough, especially when you first set your plan in place, so try to keep in mind that you can still allow for a treat every once in a while, just within reason.

7. Strive to achieve

Before you commit to your New Year’s budget, ensure that it is achievable. Don’t be too hard on yourself by setting an ambitious budget.

These are often hard to stick to and financial goals only work well if they are realistically achievable.

8. Stay committed

It always helps if you can find a family member, friend or partner who wants to budget alongside you.

Take the time to regularly sit down together. That way you’ll encourage each another to stay committed through those indulgent moments.

9. Simplify saving

It is always beneficial to review your saving scheme and see if you can add a little extra into your savings account each month. You can never save too much.

If you are not putting anything aside for your savings, start by saving 10% of your income. You can always increase or decrease the amount if you need or want to.

10. Watch those investments

Check to see if your investments are still working for you and making your savings grow. A balanced portfolio that benefits from compound interest is best amid the current stock market volatility.

11. Money matters

Setting a good financial example to your children and family will pay dividends. By practicing good financial habits in the New Year, your children can begin to learn the value of money from leading by example.

Take the time to talk to your children about money and make it fun by trying out some fun games and tools.

12. Keep a close check

Are you realistically achieving your financial goals? If you find yourself answering ‘no’, re-evaluate your targets. Things might happen in life that will affect your disposable income, such as marriage, childbirth and sending a loved one away to university.

Times like these can be a good opportunity to re-evaluate and check the efficiency of your budget.

Pic credit: Grant Cochrane/ FreeDigitalPhotos.net

Do you have financial resolutions for 2012? Tell cashy...