The new year is always a great time to think about your money. Our blogger Andy takes us through his plans to improve his finances in 2016.
In 2015 I got married, so pretty much every spending and saving decision was focused on that and the honeymoon. Now the wedding is over (and bank balance a lot lower), there are a few things I want to do with my money.
Some of these resolutions will help me in the here and now, while others are making sure I’m protected in the future
These won’t all apply to you, but hopefully you’ll take some inspiration to make 2016 the year you get your finances back on track.
Check up on my pension plans
I’ve paid into my workplace pensions for years, but I’ve no idea how much my payments will be worth in the 30-odd years it’ll take until I can retire.
The Money Advice Service website has a pensions calculator to estimate what my current pots will be worth, and that should give me a sense of whether I need to pay in more now to have the income I think I’ll need when I retire.
Share the responsibility
Since my job involves knowing about personal finance, I’ve always taken the lead on our saving and spending.
This has had an unexpected side effect in that my wife has had less and less to do with managing not just our finances, but her own too. Which isn’t a good thing as it’s never a good idea for one person in a relationship to have total control of dealings with money.
It hasn’t caused us any problems yet, but I don’t want it to in the future.
So, we’ll be setting up a joint account for household bills and spending, and another for savings. Then we’ll be keeping our own savings separate. Even though we’ll still buy some things together, this way we’ll both have a clearer understanding of what we’re each spending money on.
Keep on saving
Though I don’t have a big project to focus my efforts on this year, I’m still going to put money away each month. A goal can really help motivate to do this, but since I don’t know what that is yet, I’m going to put it towards an emergency fund.
Ideally I won’t spend it, but all I need is an unexpected home repair or an injury that would stop me working and I’d hopefully have enough to cover the costs associated without having to borrow. I always aim to have two or three months of expenses saved up.
Keep better track of what I spend
When saving for the wedding, I was on a pretty tight budget. Now I’m going to have a greater amount of disposable income to spend each month – and the more you spend, the harder it can be to know exactly how much you have.
To help stay on top of my bank balance, I’m going to keep a spending diary. Not only will this help me keep to budget, it will also highlight places where I’m spending too much or potentially wasting money.