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If you haven't been paying attention to your finances for a while, it may have come as a shock to find yourself overspent in the new year. Perhaps you got into bad money habits over the past few months without fully realising with all the extra expense of Christmas. Spring is the perfect time to review your money situation, set some goals and change your bad habits for good- for the sake of your mental wellbeing.
Check Out Your Paperwork
To get a true idea of your current financial situation you need to see the big picture - that means gathering up the statements for everything from that high interest credit card that's been ticking away, to your current account, any savings and investments and long term secured loans and looking across the board to really understand your position. If you don't, then you can't work out how to improve things or work out how much spare cash you have to save or invest and what bills you pay which could be cut out or reduced down through shopping around for electricity suppliers or mobile phone contracts. There may be unused subscriptions or old memberships you had overlooked which could be cancelled.
Get Tough On Debt
So many people chip away slowly at their debt without ever really getting anywhere. In truth, although some manageable debt is perfectly okay and helps you to build a strong credit rating, most of it is toxic. Arrange all the debt you have from lowest to highest by the interest rate. Concentrate your payments on the debt with the highest interest first - this could save you thousands in the long run. If you have savings doing nothing it could also be a good idea to use them to pay down the debt first, as you will lose far more on high interest credit charges than you are likely to gain in a savings account. Don't leave yourself without an emergency fund though.
Try A No Spend Week
If your spending patterns are a bit messed up and you can't seem to break bad habits, then you could try a regular no spend week. For one week of every month, try to have a complete spending ban. The key is to plan ahead and make sure you don't have to buy lunches or coffees out. Resisting temptation is much easier when it's only one week at a time after all!
Set Your Goals
Think about what you want your money to achieve for you. It could be the funds to travel and see some of the world. You could be thinking of saving towards your first home. Thinking about what you want to achieve in life can help you to clarify how you need your money to work for you. From there, you can break down steps to get towards your goals, like working out a monthly savings amount. When there is something to aim for, it makes it so much easier to make the right choices