New Year Resolutions are not always a waste of time. One survey from last year reported that almost two-thirds of those who made resolutions were able to stick with them. Resolutions about health are usually the most popular, but those about money are a strong second. So here are some suggestions for a monthly financial to-do list that doesn’t go by the wayside. Some of these financial tasks are time-sensitive, such as tax returns, But you can tackle the rest in any order you see fit and ignore those that don’t apply to you or that you’ve already achieved.
January
For many of us a desire to finally ‘sort out my money’ makes its annual appearance so start by jotting down your key financial worries. It will help to look back on the year gone and think about what you want to do better. Think about where you want to stand a year from now – and be realistic with your goals.
February
The very first step on the road to financial peace of mind is to be aware of (and write down!) what’s coming in every month and what’s going out. Take this opportunity to sort out your paperwork and get organised. Are you running a surplus or a deficit?
March
If you’re running a deficit (on an annual basis) make a specific plan around what costs you can cut, looking particularly at non-essential purchases that you perhaps can do without.
April
If you’re running a surplus (on an annual basis) make a savings plan to move that running surplus into a deposit account or (even better) an investment account that is not for short term use. I suggest keeping around 6 months of living expenses in cash – after that, you need to invest.
May
If you’re carrying any form of expensive debt (such as credit card debt or a car loan) then repaying it should be your priority. Do this after establishing an emergency cash fund but before making any savings or investment contributions.
June
Time to check back on how that budget is going. Is your budget specific enough? Are you spending wisely? Are you building a nest-egg with appropriate investing? Do you still have a reasonable cash reserve?
July
Take a break. By now I hope you are not dwelling on the same old money worries. Just having a plan (or an advisor if your affairs are quite complicated) should result in action and relieve you of those perpetual and negative circular thoughts.
August
Are you paid enough? Do you deserve a raise? Think about ways in which you can manoeuvre a raise or a promotion. Negotiating a pay rise can be a daunting task, but with the right approach and preparation, it’s definitely achievable
September
Make September the month in which you think about your ‘future self’ – do you need to start a pension or do you need to make a contribution before the October deadline so you can maximise your tax relief. And make sure you stay informed about any old pensions that you’ve accumulated over the years.
October
This is tax return month. So make sure to get your return in on time and be sure to claim any available tax incentives and reliefs. There’s plenty of online help if you’re in doubt about the process.
November
Christmas is a big spending time for us all so now is the time to ensure your ongoing budget can cope with some large one-off spends. Avoid the shock that comes with a credit card bill you know you can’t afford.
December
Time to look back, review how the year has gone financially and think about improvements you can make next year. And don’t forget about calendar year end deadlines for tax efficient gifting and company pension contributions.