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Reaching for and obtaining financial fitness may seem akin to summiting Mt Everest; however with a good mental attitude and much enthusiasm you can achieve realistic, substantial goals.
A good place to begin your money management is with the most basic tool available and that is a budget planner. Many people think this project can be squeezed in-between supper and that new movie playing on TV. However, you would be better off committing a whole day to assess your financial health.
Before bemoaning that old adage that budgets don’t work, try simplifying your calculations; disposable income versus monthly expenditure. If you discover that you are not earning enough to cover these costs, which should include savings, begin shearing off all those non-essential items, such as that under-utilized gym membership or cable TV subscription. Furthermore, people mostly aspire to being generous over the festive holidays, but in order to cope with a more demanding budget, gift-giving and a loaded lunch table should be trimmed.
If it all looks like doom and gloom, a second option is to find a trustworthy financial advisor.
Good advice is freely available from the internet as well as government forums. By shaving off a couple of figures off your energy bills or securing a more economical phone contract, the whole process of becoming more financially aware becomes less painful and more optimistic. Selling assets may be the catalyst to jump starting your savings project and taking an honest, microscopic look at your debts should set you on the right path.
Once you have accurate figures for your expenses and income, you will know how to apportion your money and begin saving. A suggestion would be to have several savings accounts with each account existing for a particular goal i.e. holiday fund, Christmas shopping, or one to cover any illness, etc. However, it would be best to discuss this and all other financial matters with an expert before making any decisions.
Pay day may see you splitting up your pay cheque into these different vaults. It is extremely satisfying to see your money growing for each goal. Ensure these accounts have tax-saving and interest-earning incentives in order to get a maximum return. For those long-term goals such as education and retirement, it may be a good idea to think about investment options. An important factor to consider is inflation and to understand the actual spending power needed in 10 or 20 years from the time you begin saving. The longer your money remains untouched, the more it could potentially earn. That said, high risk investment portfolios would not suit those who cannot afford to lose money in a volatile stock market.
In addition to these larger financial decisions, you can also look for ways to make everyday savings. For example, you can research multi car insurance companies instead of paying over the odds to insure every member of the family separately. You can also look online on comparison sites to discover which energy company offers the best deal. If you’re spending a lot on transport, consider cycling instead of driving or taking the train to work. There are so many things people aspire to when setting financial targets; saving for that special wedding, reliable cars for your family, a holiday of a lifetime and, of course, those golden years of retirement. Obtaining this wish-list will be a work in progress; that proverbial pot of gold will not appear simply because you have a set of figures on paper. Financial discipline should become your new best friend in order to fulfil these life ambitions.