As the year starts coming to a close, it is a good time to reflect on the current state of your finances, as well as the financial decisions you have made this year. Setting some time aside to sit down and give yourself a financial check in will benefit you by helping you decipher if you have stuck to the goals and resolutions you made at the beginning of the year and better prepare you for conquering new financial goals in the upcoming new year.
There are a few important questions you should ask yourself when performing your financial check in:
Am I budgeting?
First of all, do you have a budget in place? And if so, have you been sticking to it on a monthly basis? Another question to ask, if you feel as though you haven’t been able to stick to your budget, is whether your budget is realistic and achievable? Do you need to change some of your spending habits in order to adhere to your budget?
When it comes to reviewing and altering your budget to suit your needs, it is important to include all of your expenses – from the big and important monthly expenses such as rent and travel expenses, to the smaller expenses such as a gym contract or any other monthly subscriptions. If you feel as though you have smaller monthly expenses that do not make much of an impact, you will be surprised what a difference they make in the whole scheme of things when you add them up. As the saying goes: “Beware of the little expenses, a small leak will sink a great ship.”
Am I saving?
After you have set up a budget that is realistic and promotes responsible spending habits, you should have some of your monthly income left over after your living expenses. Have you been putting away any additional cash into a savings account? It is always difficult to put money away as opposed to spending it – the immediate gratification of spending always poses a dangerous temptation, but saving can be very rewarding in the long run and can help you in an emergency situation.
Downloading an app that tracks your saving can help you with feeling content about putting a portion of your salary away every month. As you see the money grow, you will feel more and more rewarded. Keeping a big goal in mind, such as saving up to buy a car, will also help you stay motivated when putting away money each month.
If you do not have money left over after your expenses, or if you are running out of money before the end of the month, it is time to realistically review your lifestyle to see if you can cut down on any of your monthly spending. Do you have any debt obligations? And is this the reason you do not have money to put away each month? This brings us to the next question.
Do I need help with my debt?
Debt is one of those things that is easy to rack up, but difficult to pay off. This can be due to the interest rates and additional fees that you commit to when you take out the debt, or from not fully grasping the long term commitment that paying off debt commands and how it can affect you in the future. For example, if you suffer a loss of income, your debt obligations will still remain. If you feel as though you are battling to keep up with your debt repayments, you can seek professional help that will lighten the burden, as well as saving you money in the long run.
Debt counselling is a process which involves negotiating with credit providers for lower interest rates and extended payment terms so that you can afford your monthly living expenses. A debt consolidation loan will help you simplify your debt repayments by consolidating them all into one loan which can also potentially save you money on interest rates and fees. You can visit www.debtbusters.co.za to find out more about these debt solutions.
A personal financial check in will be both beneficial and productive for you. Remaining in control of your finances will help you to reach your goals, to stay prepared in case of an emergency and to keep track of your debt obligations by not allowing them to get out of hand.