Better Now Than Never…
This year is a big year for me. My 30th birthday. And whilst I’m not seeing it as a tombstone for the end of my youth, I am seeing it as a milestone of things I really want to achieve before my birthday (in November). One of these things is getting better control of my finances, which is why I’ve set myself some money rules that I’m following and hoping to have established as habits ready for 2021.
I feel my attitude towards money and finances has really changed in the last 12 months. This new decade of my life that is coming brings new goals and desires that I want to achieve. Most of them require money. But there’s also a stability factor involved. I want to feel more in control, stronger when it comes to my personal wealth.
Talking about money is a little different from my usual content. But I know that there are other people feeling the same way as me. I want to reassure anyone reading this feels that they are not alone. There’s many of us just trying to do our best when it comes to personal finances. I hope these money rules that I’m starting up in my life will give you a boost of confidence to take control of yours. Even if you only take up one of these things, it’s a step in a positive direction…
BUDGETING FOR THE ENTIRE YEAR RATHER THAN A MONTH.
This is something that I was inspired to do recently thanks to The Financial Confessions podcast, but it makes complete sense. I have a spreadsheet that I use to track my spending (read about it here in this post) on a monthly basis, but now I’ve completed my tabs for the rest of the year. I’ve added everything I know I’m going to spend money on. This includes friend’s birthdays, trips and dental checkups (very important to me). It’s allowed me to really see which months we can put more money away. As well as which months we may need to reduce our savings. Overall, I’ve been able to see the bigger picture and I feel much more confident that I’m going to crush this year with my saving goals and see exactly where my money is going each and every month for the rest of 2020.
GETTING A WILL.
So starting with a heavy topic, but this goes hand in hand with finances. Now, a will is not something that my husband and I need right now, as we don’t own property, have children or anything like that. But it is something to consider when we eventually do. Even without a will, there are other things you can establish. If you are paying into a private pension, you can set up a beneficiary, so if you pass before you get your money, you can select someone to claim it on your behalf. Part of mine is going to charity and the rest is going to my husband, with his doing the same.
Little things like this are usually things you want to avoid (no one wants to think about the future in that way) but it’s important to think about these things and get it over and done with. I have complete peace of mind now knowing if anything happened to me, Lee is okay and when we eventually get a will, there will be even more peace that comes with it.
INVESTING IN MY PENSION.
Another thing that none of us really want to think about or ‘waste money on’ but a pension, but in order to live a gorgeous, fabulous life in our old age, we need to start thinking about this now. If you’re with a company whereby they will match your contribution, it’s worth taking them up on the offer. It’s before tax too, so you never see that money so you’ll never miss it. It’s also worth looking at your income as a whole and seeing at the possibility of increasing your contribution. Even 1% is worth doing. Ellevest, a financial service site for women, advises looking at using half of your age as an investment percentage (for example for me, I should be looking at 14/ 15%. This is not possible for me at the moment, but I think the closest you can get to 10% is a win.
PAY OFF DEBTS.
This is a big one for me. I have debt that if I stick to plan will be paid off next year. So whilst it will not be done in time for my 30th birthday, I want to be as close to my goals as possible. I’m trying the snowball method. So far, my husband and I are doing well (I’ll explain this more at another time). This is a complete life change which and a money rule that I’m going to take with for the rest of my life.
ESTABLISHING AN EMERGENCY FUND.
This is my first stop after paying my debts. Whilst I’m already actively saving money right now (never throw all your money towards paying off debt, otherwise you can be back to square one if life throws you a curveball). I know that for later on in life, we’ll need an emergency fund. My plan is once everything is paid off, I want to have 6 months of our income saved in an easy access saving account. Just in case and big life changes happen. From there I want another pot of £1000 for small emergencies (car fixing, etc). As I mentioned this is not something I can actively work towards now. However, every little bit of saving that I can do now will put me in the right mindset ready for the future.
Now is the time to start mastering the financial basics, one of them being money mindset. Knowing exactly where your money is coming in and where your earnings are going. Right now, I’m amending my daily habits to stand alongside my short and long term goals. A perfect example of this is our bathroom renovation. This is something I could have started and completed last year. But rather than chuck money at it and be without the other things I also wanted for the rest of the month, I saved and started the project when it was better suited to our life. A lot of my daily habits are changing for the better and I hope they continue to head this way.
INVESTING IN VALUABLES.
I’m done with fast fashion. Now, that’s not to say that I’m going to buying designer from now on (a girl can dream). But rather I’m done with buying anything in life for the sake of buying. I rather buy and invest my money into something that I know will last and I’ll get so much wear/ use out of it. For example, my face cream. It costs £40, but lasts me an entire year and keeps my skin soft and subtle. With my wardrobe, I’m only buying pieces I love and will always wear. If I’m not 100% about it, it’s not going into my basket. Now is the time of our lives to really invest in pieces. Things that is going to add value and last rather than frivolous spending.
EVALUATE YOUR FINANCIAL PROGRESS.
Much like a workout, you wouldn’t just do it and not track your progress. Whilst there are some areas of money habits you can put on autopilot, you still need to check back in every so often. Even if it’s checking your bank balance every day. This is a huge habit that not many of us do and can lead to such progress. If you’re in a relationship, having money dates that allow both of you to see your progress can help. It gives you a confidence boost to know you’re doing well and kicking butt. However, what it also allows you to do is reevaluate and pivot your goals when you need to. Not everything is plain sailing. But keeping track and evaluating your financial progress will allow you to manage these and to continue to kick butt.