January is always a time when we are tightening our belts and trying to rein in our spending after the holiday season is over. The last couple of years have given us plenty of reasons to keep a closer eye on our finances and even though things are looking much brighter out in the world right now, we all need to make sure that we are being responsible with our money.
When costs start to stack up, energy prices start rising, and we are considering investing in some high-price items, planning ahead can sometimes start to feel a little overwhelming. That is why we have put together this guide to how to keep your budget down in key areas.
Work Up A Budget
The first and most important thing that you need to remember is that you are not going to be able to keep control of your finances if you do not have a firm handle on what your financial situation is. This is how people end up spiraling into a huge amount of debt. If you want to start the new year with a fresh approach and a better outlook, then the best thing you can do is take some time to sit down with your finances and go through each and every transaction. Go through your direct debits, your bill payments, your mortgage, all the way down to your morning coffee order. Once you understand where the money is going, you can start to take control.
Get More Streamlined
Over the last couple of years, we have all been guilty of doing a little more online spending than we would usually. Many of us signed up to a range of different subscriptions, for example, looking for ways to keep ourselves busy and entertained. Now that things are back to normal, it is time for you to get ruthless about streamlining your spending. If you are no longer watching movies or TV shows on that streaming service, it is time to cancel it. Are you letting those regular fresh food deliveries go bad at the back of the fridge? Cancel that membership. Remember: you can always sign back up if you feel like you made a mistake but try living without it for a while.
Do Your Research When It Comes To Big Investments
All of us have been guilty of rushing a purchase at one point or another. Maybe it was because the situation was urgent, maybe we wanted to treat ourselves, maybe we were being pressured by a sales agent who really knew what they were doing. But there is nothing worse than realizing that you have just spent far too much money on something that is going to take a long time to pay off. That is why it is so important that you do your research ahead of time so that you know what you are getting into and avoid getting pushed into spending more than you are comfortable with.
Take finding a new car, for example. Many people are looking at investing in a new Tesla right now for a wide range of reasons, and because of their environmental awareness in particular. But the big question when it comes to Tesla is lease vs. buy. There are a lot of factors in play, so understanding all the pros and cons is important. If you are considering leasing vs buying a Tesla, this breakdown from Compare walks you through all the most important points. Compare works with over 50 auto companies to help you find the best car insurance for your needs.
Don’t Neglect Your Future
When things are tough, it can be hard to think about making sure that we are putting enough away for the future. So much of managing your budget is about monitoring your spending and staying on top of debt but investing for the years to come is just as important. If you are asking yourself when you should start saving into your pension and making those long-term investments, the answer is always “now” regardless of how old you are or where you are in life.
Any steps that you can take now, no matter how small, will make things much easier for you down the line. You can start by looking at what incentives your employer offers, such as contribution matching on a 401(k), and taking advantage of those. Be wary of any pension scams and do your research before you sign up to any investment. It is time to open a savings account and try to make sure that you are putting a set amount of money away every month. There are apps that you can find that will help you to automate the process and make it a little easier. When it comes to making those investments, the main thing to remember is that you should never put all your eggs in one basket.
Find more articles in our budget archives.