Sometimes it can be hard to think long-term, but there are always benefits to planning for the future.
This guide could help you work out the steps to take now to create the future you want.
Creating a plan
There are several things to consider when creating a plan:
What your goals are
What your families’ goals are
What your current spending habits are like
How much you can afford to save while still paying for essentials
What an achievable budget would look like for you
The most important thing to remember is that a plan will look different for everyone and it should be personal to you to help you reach your goals, whatever they may be.
What to do if you’re worried about money
If things are getting on top of you, the most important thing is to talk. Speak to your partner, trusted family members or friends. It may be a good idea to work out as a family where you could save money and discuss what your combined financial goals are.
Including everyone in the financial decision making can help your family understand how they can help and may help settle your worries – even if it’s to create meal plans to decrease the cost of food or switching the lights off when leaving a room.
It also may be a good idea to have money conversations with your children to help them understand and even create good money habits as they get older.
What are you currently spending?
It may be a good idea to take a proper look at what you’re spending money on to help you work out where you can cut costs.
The easiest way to do this is via your banking app. Some banks offer functionality via their app which splits your expenses into categories which can help you see where you may want to focus your cost-cutting attention.
There are also plenty of budgeting apps out there that can help you see where your money is or you could simply write everything down in categories, for example, ‘groceries’, ‘clothes’, ‘bills’. This will also show you if you’re spending more than you have coming in.
You could also label each spend as either ‘essential’ or ‘not essential’. By labelling your spending like this, you’ll be able to quickly see how much your family spends on things that you don’t really need, allowing you to identify areas to save.
You might also be able to make some savings on your essentials. For example, there might be a better deal available with another energy supplier or internet provider. Just be careful to check the full terms and conditions before committing – sometimes companies offer what sounds like a great deal but there are terms which change this. It is also good to keep in mind that you may have to pay your current provider an exit fee.
Reducing the cost of debt
If you’re paying a higher rate of interest on debt than you would be getting on savings, you might choose to pay this off before you start building your savings to put yourself in a better financial position first.
Of course, this is easier said than done, but it may be a good start to add this to your goals and aim to pay more than the interest each month to help bring it down.
Only you can determine what is best for you, but you finding ways to reduce how much interest you’re paying so that you’re able to reduce your debt may help you meet your future goals.
You should also look out for 0% balance transfers on credit cards and debt consolidation loans but remember to read the terms and conditions before committing. It is important to feel confident that moving your debt to a different product is going to reduce your interest rates.
Financial planning is different for everything but getting started is the first step. Once you create good money habits that work for you, the journey will become easier over time.
If you would like more information on saving and budgeting, you may find it useful to read our other article, “Budgeting rules: what are they and which is best for you?”
