Starting Your Finances Again From Scratch
I start afresh generally about six times a year. Spring is usually one of the bigger overhauls of my current state of being, dredging back the winter habits of no exercise, too much food and spending too much money.
While I wish I could just start and stick with it, I take some comfort that even when you slip up, you can always start anew. So here’s how to start afresh financially, inspired by Suze Orman.
Love Yourself
Guilt is getting you nowhere. I know personal trainers like to shame people about their eating habits on reality television, but does that really help anyone lose weight? Personally I think you’re always going to be able to stick to a plan better if you’re happy and confident, not if you constantly feel terrible about slipping up. So your budget failed. So you didn’t meet you savings schedule this month.
Don’t spend a fortune to try and make your guilt better. Instead, acknowledge that it happened and that everyone slips up occasionally. Then get right back on the horse.
Re-Evaluate
So the train derailed somewhat. It’s a great time then to re-evaluate what the financial picture is before starting again. Why did you budget fail? Should you make more allowances for bills? Maybe it was too strict, and that lead you to a spending splurge. Open up every statement and spread them out on the table in front of you. Painful, but necessary.
Tackle The Debt
Suze is right. We can’t do anything about interest rates or the state of the economy. For that matter, we can’t do anything about the job market, the ALP’s steady decline to farce in NSW or stopping Oliver Stone from ever making another movie, but we can control our debt. Pay it off steadily, pay it off slowly.
Put all your resources (beside the emergency fund savings off course) into getting rid of the debt. Don’t let the banks get rich off the back of your hard work.
Save Harder
I tend to think that I never have any money left over to save. That would be one of my many self-lies, once I account for coffees, and books, and dinners. I can save more if I save harder and every time I start afresh, I try to save a little bit more. Try and reschedule your savings plan so it can be more easily achieved with some cutbacks from every day life. Maybe work out how to cut down your utility bills, buy a second-hand car, not an off-the-rack variety.
Get Overall
If you’re starting afresh, now is a good time to look at the overall place you are in financially. It’s easy to get obsessed with the every day, but once in a while, it’ll save you money in the long run if you update yourself on how your super is looking, what your life insurance is and whether any other kind of insurance needs to be improved or can be gotten rid of. Suze (yes we are on first name terms) suggests reassessing your asset portfolio and schedule an appointment with your financial advisor to look at diversifying.
Knowing the reality of your financial situation is crucial in starting afresh, and keeping on with the New Financial You for years to come.
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