The end of the year is just around the corner which means it’s the perfect time for a spot of self-reflection, making resolutions and financial planning for the next 12 months.
We can all struggle to make the best decisions when it comes to money, but often the hardest part is knowing where to start.
Read More Related Articles Read More Related ArticlesShona Lowe, financial planning expert at abrdn.Com, shares five starting points to help improve
your cashflow from January 1, 2022.
1. Have a clear budget
She said: “Analyse your spending habits from the last six to 12 months so you can see where you spend the most - and also where you could make any savings.
“Write down your expected outgoings for the next month. If you have any money left over, you can think about your other financial goals, such as saving and investing.
“If the outgoings are more than your income, consider where you could make changes. If you have problems with debt, making a list of what you owe, to whom and how much is a good place to start, as is getting copies of your credit reports.”
Try to have a buffer, so if you end up slightly overspending you won't blow your budget.
2. Set goalsThese could be saving for something such as a new car or holiday, helping your children at university, or repaying debts.
To make your targets more effective you might also want to set a time frame for each, so you have a clearer idea of how to get there.
3. Talk about money"Financial decisions can come with anxiety and stress, but that's why speaking to friends or family can help," Shona advises.
"They might have ideas on how you could make a goal more obtainable."
If you don't feel comfortable with this, you could consider speaking to a financial planner.
Financial help available in Scotland 4. Plan for emergenciesThe coronavirus pandemic has taught us the importance of having a savings pot in case of emergencies.
Shona explains: "There are several benefits to investing your money, most notably the potential for stronger returns over the long-term, but you still always want to ensure you have an amount of savings in cash to fall back on if you need it."
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5. Finally, don't rush itYou can tweak and amend it as the months roll by, but don’t abandon it.
