Think small but make sure they happen!

The start of a New Year is invariably accompanied by a pressure to make some significant changes to our lives in the style, “New Year, new me!”

We also know that such resolutions, although well intentioned, are usually fragile and, even if they are enacted, will do well to last the month of January.

January is of course the month in which we regret all that we ate in December. Doing the right things with our money can be thought of as analogous to our relationship with food. We have all heard the messages many times, but the gap between being told what we should be doing and actually doing it can often appear insurmountable.

The frustration at not being able to bridge the gap between intention and reality can be attributed to being overly ambitious and setting the bar of expected achievement too high. Christmas couch potato to six pack Adonis before the daffodils appear is probably just not going to happen for most of us.

You may have many things that ideally you would like to do better and/or smarter with your money. Switch bank accounts, review your investments, cancel some unused subscriptions, move your mortgage, create a Financial Plan …

To increase your chances of success in this annual quest for renewal and improvement , how about starting small, choosing just one project or target and making sure it happens? The satisfaction you will feel from just a small victory should then give you the energy to move on to the next step.

Getting started

Everyone will have their own ideas about what they should prioritise to get their money house in order. If you are often perplexed about how your money disappears, how about asking yourself this question, which works particularly well at this time of year:

‘How much did you spend in 2021 and what did you spend it on?’

Nobody would dream of running a business of any size without knowing how much they spent in a year, how it compared to a plan as well as to the equivalent period last year.

Banking apps and online statements now mean that it should be relatively quick and easy to summarise your spending in a calendar year across a small range of categories such as groceries, insurance, vehicles, housing and so forth. Don’t sweat the small stuff but get as much detail as you need to really understand what you are spending your money on.

Getting rewarded

Making the effort to summarise your 2021 spending could reward you in a number of different ways including:

• One or two of the categories might be higher that you thought, provoke further investigation and maybe some quick savings.
• You can use the figures from last year to set targets for this year (if energy bills are doubling this year, where can I recoup some or all of that additional cost?).
• Making you think about whether you are spending your money on things that really matter to you.

You should feel as though you have more control and understanding of your spending, especially if you can split it between what you need to spend and what you want to spend. This will give you an idea of how much choice and flexibility you really have with your spending.

Spending is not everyone’s priority but whatever financial dragon you choose to slay first this year, set some reasonable expectations over a short timeframe and enjoy the satisfaction of achieving your goal and taking a meaningful step towards making the most of your money.

We wish you a prosperous and Covid free 2022 and don’t forget we are always here to help.