Finances are difficult to manage, especially if you don’t have the patience and self-control to deal with numbers and figures. And as much as we want to save our money, bills must be paid and expenses need to be kept track of. Therefore, people often take control of their finances at the end of every year so they can prepare for the next one. It’s also a way to check your overall expenses and find a way to decrease them.
For people who are in debt or unemployed, controlling your finances isn’t just an option—it’s a necessity. Without the right mindset and resources, you can seriously find yourself in hot water. Additionally, if there’s a goal you want to reach at a certain point in your life, such as buying a car or saving up for a house, controlling your finances at the end of each year is a good way to start.
Since it’s already December and 2020 is fast approaching, take note of the following tips:
1. Set realistic goals and top priorities
Knowing what you want to achieve at the start of each year solidifies your goals and priorities by the time December arrives. If you didn’t accomplish what you wanted, then you can take a step back and adjust your plans. However, this only works if you’ve already set goals in January. If you haven’t yet, then this is the best time to set realistic ones.
When it comes to setting realistic goals, it means understanding that certain bills must be paid and daily indulges must be sacrificed. For example, you can start simple such as eating out less or lowering your electric bill by turning off certain devices at night. It also doesn’t hurt to treat yourself ever occasionally but if it comes at the expense of rent money, then you should check your priorities again. It might be difficult to achieve first but if you remind yourself of your end goal, then it will be worth it at the end.
2. Pay off remaining debts
Debts are one of the major setbacks to controlling your finances. It can come from anywhere—student debt or even bank loans. While it may have been necessary to go into debt at the very beginning, you need to focus on paying them off. You can’t save money and reach end goals if debt is still holding you back. There’s no easy way to pay off debt immediately but you can start by setting a portion of your money for it.
3. Plan next year’s savings
Controlling your finances just means lots of planning and sticking to that said plan. You might think it’s easy to save your money but it’s harder than you think, especially when emergency situations come up. It might be difficult but not impossible. You can always rely on cooperatives to save your money for you or to invest them for your future. An example of trustworthy cooperatives includes FICCO.
4. Start budgeting your expenses
Other than debt, daily expenses can’t be avoided. After all, they include the money you spend on your food, your fare, your rent, your clothes, etc. It’s impossible to stop spending on expenses altogether but you can budget them accordingly. This can be done by creating a list of your expenses and figuring out how to spend less on the major ones. For example, if you spend so much on food, you can always cook at home to save more.
5. Learn about investing
Take note—it’s difficult to invest on your future if you still have remaining debt or your expenses cost more than your savings. Investing takes careful planning with a financial advisor and you need to ensure you’ll be ready for it. However, it doesn’t necessarily mean you need to take a huge chunk of your money to put into your investments. With the spare change you have in your pocket, you can use them to start your investment plan.
Investing is one of the smarter ways to make your money grow and ensure you’ll have money by the end of your career. This is done through several methods such as mutual funds, bonds and retirement accounts. You don’t have to start right away but knowing when to start is a major contributing factor to successfully controlling your finances.
At the end of the day, you have full control over what to do with your money. If you’re not sure where to start, you can always contact professional financial advisors for help! FICCO is one of them. They can ensure you’re making the right financial choices for your future.