As we transition from the excitement of New Year’s resolutions and delve deeper into the year, it might be a good idea to take a closer, more measured look at your financial status. This is not the enthusiastic glance you give when you embark on a new year, full of resolve that this year will be different.
Rather, this is about conducting an objective analysis of your financial situation and taking necessary steps to get your finances in shape. This is the ideal time for such an assessment, especially for those living in colder parts of the country, who tend to hunker down for the winter season and save more by spending less on recreational activities.
Here are a few key points to consider:
1. EVALUATE YOUR HOLIDAY SPENDING: Often, we underestimate the amount of money spent during the holiday season. Now that the festive period is over, it’s a great time to calculate your total expenditure. Divide this figure by 12 and start setting aside one-twelfth of your holiday expenses each month. Come next December, you won’t face any financial turmoil due to holiday spending.
2. PLAN YOUR VACATIONS: Considering a summer getaway? Start searching for deals and make your bookings now. Figure out if you have saved enough for the trip or need to save a bit more. If you need extra savings, look for budget areas you can tighten to set aside more for your vacation.
3. ASSESS YOUR OVERALL BUDGET: Evaluate to see if you are able to cover your monthly bills comfortably. Do you have a contingency fund? Are you able to save for your retirement and perhaps your kids’ college funds? If you find yourself answering ‘no’ to any of these, it might be time for a reality check on your budget. Identify areas of excessive spending and potential cost cuttings. If required, consider avenues for enhanced income (#4).
4. EXPLORE SIDE JOBS: If your current job isn’t enough to meet your needs, look into secondary income options. There are various opportunities ranging from freelance writing to babysitting or even selling unused items around your home. Choose a job that aligns with your skillset and you’re likely to bag your first client soon.
5. CONSIDER ASKING FOR A RAISE: If it has been a while since your last salary increment and your boss appreciates your performance, it might be a good time to request a raise. Be prepared with a list of contributions you’ve made and any recent praise-worthy work.
Even if you’re unable to secure the raise, you can always find other ways to maximize your income.
Commit some time this month to reassess your financial standing. Develop and execute plans to bolster your financial health in 2014. You will not regret it.
Are there any other actions you undertake when analyzing and improving your monetary situation?
