Like many of the team at AMP, you may have set goals to be financially in a better position in 2016. Unfortunately most of us will struggle to turn our plans into action. University of Scranton research says that only 8 percent will achieve their financial goals.
To help you keep (or get) your finances for 2016 and beyond on track, we’ve put together this simple action plan to get started.
- Understand where you are at today. Start by building a picture of your financial worth. That might sound complicated but it’s simply your assets, like savings, investments and big ticket items that you own, less any debts such as credit cards, overdrafts or mortgages.
Often people don’t take the time to really get an idea of their situation due to simply thinking it will be worse than what they think it is. But by actually understanding where you are now with your money it will become a lot easier to make decisions going forward.
- Look at where you want to go. Hopefully you’ll want to go somewhere, but what does that place look like? Depending on where you’re at with your life now this can be quite different to others. That place might be debt-free, wealthy, or just having the freedom to do what you want.
Think about the things that matter to you – is it being mortgage-free sooner, having money to take a holiday each year or putting your children through university? Once you have this, place a date next to it. Dreams are goals without deadlines, so place a deadline against your dreams and they’ll immediately become a lot more real.
- Identify where you are falling short. Are you walking a tightrope where if you fall it spells disaster? Often it’s about simply spending differently and changing the bad habits into good ones. Try spending less on the things you don’t really need and more on important things that will help you get ahead. It’s all about choices and distinguishing between your needs and wants.
- Reward yourself. It doesn’t have to be about living off baked beans and canned soup each day. Give yourself regular rewards for making positive changes to your finances and building new habits. Put a little aside to do activities like going to the movies or going out for dinner now and then. Ironically, giving yourself these small rewards can actually help you to keep on track.
- Get on and do it. Plans are only good intentions unless you do something about them. The only way to effect positive change is by doing something, so get started as soon as you can. And tell your family and friends what you’re doing. They’ll support what you’re doing and it will make it feel more real and achievable.
Don’t try to do it all yourself if you aren’t sure. Good financial management takes hard work and starts with asking lots of questions, making some big decisions and then following through. This is your future and you want to make sure it’s the best it can be. Try getting yourself a coach in the form of a financial Adviser. They’ll ask you the right questions and help you start on the journey to building a brighter financial future.