The nights are growing colder and shorter, the weather is becoming more inclement, and the heatwave which blessed many countries around the world is rapidly receding. Autumn and winter are coming, and with them major holidays like Christmas and New Year. This is a time for reflection, celebration and – yes – analysis.
Autumn and winter make for an excellent time period in which to reassess your finances. As the year draws to a close, you can take stock of financial decisions you’ve made this year and try to understand how they’ve impacted your current position. Whether you’re finishing 2018 in the black or in the red, there are always ways to improve on your financial standing for the coming year. Here are some financial tips for 2019 that you shouldn’t ignore.
Find out your credit rating
It’s amazing how many people still don’t know what their credit rating is. This important indicator shows how trustworthy companies and banks think you are; without a high credit score, you’ll struggle to apply for loans, home mortgages and even mobile phone contracts. Put simply, if your credit score is low and you hit financial difficulty, you could really be in trouble. Depending on your location, there are several services you can use to discover your credit score; the UK’s three CRAs (Credit Reference Agencies) are Experian, Equifax and Callcredit, with others available depending on region. There are a number of ways to improve your score, too, including paying bills on time, wiping out debt and clearing credit card balances.
Take out a loan (if you can)
Be careful not to get tripped up by this one. If you’re struggling financially, a loan can really help you out of a tight spot, but if you know your struggles will continue into the near and even far future, then you want to avoid this option at all costs. Still, there are a number of options available to those who need cash quickly, and if you spot a crunch period in 2018 where you needed money, there’s a good chance that period will recur in 2019. With this in mind, don’t be afraid to look into the various loan options available to you. You could take out a second mortgage, have a talk with your bank, or try a good payday loan lender for a quick cash injection; whichever option you choose, just make sure to be fiscally responsible when you do.
Draw up a budget
Although you should bear this one in mind for 2019, there’s really no reason you can’t start now, even if it’s just a practice run. It’s incredibly important to know your income and expenditure; without a detailed understanding of how you’re spending money and how much money you have to spend, it’s inevitable you’ll end up in trouble sooner or later. Start by calculating your exact income each month, then subtract your bills, necessary monthly payments, Direct Debits and so on. Once you’ve done this, figure out how much you have left over each month and then study your previous bank statements in order to understand where you’ve been spending that money, and if there’s anywhere you could be reallocating funds to improve your financial health. With a solid, dependable budget in your life, your finances can only get better.
As of March this year, roughly 25% of British adults did not have a savings account, or had no savings to their name. Although this is an understandable position if one is suffering from financial hardships, anyone with enough money to their name to squirrel away a little each month should absolutely be doing so. Savings will help you through tough times, allow you to embark on that DIY project you’ve been meaning to get around to, and help you start a family, among hundreds of other uses. There’s no better time than 2019 to start saving. During your budget calculation, if you have a little left over each month, consider sending it to a savings account rather than immediately spending it or using it as leisure money. You’ll thank yourself in a few years.
Set goals for yourself
Once you have a budget, you will understand where you can make cuts and how to cut back on the more frivolous parts of your spending (if you have any, of course). With that in mind, it’s a good idea to start creating goals for yourself. Set a ballpark figure that you need to achieve by the end of each month; this will vary depending on your income, of course, but it should be higher than that same figure was month by month in 2018, if possible. Having goals motivates us and gives us something to aim for, and the world of personal finance is no different. You’ll be thrilled if you reach your goals, but if you don’t, don’t panic; there’s still plenty of time to try and save a little more for the next month, and you can always reassess your budget on the fly.