January is commonly the longest month that salaried employees have to cope with before a pay day occurs. January is also the month we make resolutions, so it is natural that personal finances tend to be high on the list.
If you want to get fit, you might join a club or sign up to an online fitness plan and start to build up your training regime. Finances are no different – it takes effort and there are many online resources that could be your ‘club’. Being financially sound is not about how much money you have; it is about making the best use of what you have and adjusting your financial outlook throughout the year.
And this new year, more than any year, we need to take our financial situation more seriously. As you may have seen in the press, we have inflation running ahead of expectations and Covid-19 restrictions being re-introduced such as working from home again. This coupled with the news of issues in supply chains, we are all seeing a rise in the cost of living so there is no time like the present to start taking control.
1. Budget
It does not matter how much money you have or how much you earn, if you do not have any plan in place then you are unable to properly plan ahead. All it takes is a spreadsheet or a budgeting app and you can start to take control. The fuel that you put in the car and the food that you buy from the supermarket have all risen over recent months, so have you factored this in to your monthly budget?
2. Emergency funds
Many UK workers still do not have anything to fall back on should the worst happen, and the current Coronavirus situation is opening our eyes to this. Some employees have reverted back to moving from payday to payday without putting anything aside for future emergency use. There are many opinions on how much you need, but it starts with having an element of savings in your monthly budget.
3.Financial shocks in 2022
There are a number of financial shocks which we can expect in early 2022. A good example is the cost of your utilities. We are used to switching and shopping around for the best rates however, in the current energy market this is not possible. As such, many of us will end up on the ‘standard variable rate’ which is considerably higher than the deals we secured for ourselves in early 2021. So be aware, energy bills could easily move up from £1,000 a year to £2,000 a year if your fixed deal ends in 2022.
4.Do not worry!
This one is always counterintuitive, as we naturally worry when things start to get out of control or if we experience any financial difficulties. Rest assured, there are ALWAYS solutions to every financial problem that you might have. If it is debt, there are charities and Citizens Advice with multiple solutions; if it is income then your employer and your local council could help; if it is savings and investments then financial advisers and your bank could help you find a solution. If you just put your hand up, you will find help is out there.
So, having financial wellbeing as our New Year’s resolution is not hard; like all resolutions it just means we need to spend time and effort to make things better for ourselves. Taking time to manage the money in/money out and starting the savings journey will help greatly with our financial security. Seeking help is essential – we all need a helping hand from time to time.
