Prioritise your finances

Even if you didn’t do it in January, it’s not too late to review your finances. In fact, doing so at any time of year will set the foundations for a positive financial journey while creating the opportunity to fulfil your ambitions and dreams. So, let’s get started!

1. Getting a holistic overview of your finances

Budgeting is the core of any financial plan. It gives you an overview of your finances for the year ahead. Our 50/30/20 budgeting rule can help guide you to make best use of your money.

Make a list of your income and a list that shows all your essential outgoings - including utilities, insurance policies, rent or mortgage payments, loans, etc. Remember to have at least 3 months’ bank statements and receipts at hand to help you get a really honest picture.

Next, identify areas that you need to focus on - for example you’re spending habits or your level of debt. If you have a little extra left over each month, use it to bulk up your savings for upcoming life events.

It is a great idea to create a third list. One that shows all the upcoming events that you know about - birthdays, anniversaries, weddings, children’s education, holidays, Christmas. Try to set a budget for each of these events. This puts you in control of your finances knowing you’ve got it covered.

2. Review policies and utilities

It is very tempting to just leave policy renewals and utility renewals to automatically roll on but you may miss out on savings if you do. When renewing your policies and utilities, it is important to make the time to shop around.

If an existing policy or utility plan already provides good value, it’s also important to spend the time ensuring that you have sufficient level of cover and an adequate plan in place that meets your needs for the year ahead.

3. Savings

Ideally, you should be working towards building a “rainy day” fund equivalent to 3-6 months of living expenses so that you are covered if you suddenly have to pay for an unexpected event, such as a boiler breakdown, car repair, or replacing a large household appliance.

If you have a little extra left over each month then set up a Direct Debit or Standing Order to pay into a Deposit Account or Regular Savings Account as soon as you get paid.

4. Borrowings

Review your current level of debt each year, getting an overview of your loan(s), credit card(s) and mortgage to ensure that you are still able to manage repayments for the year ahead. If you feel that this may be a struggle then you need to engage with your lender to agree on a financial action plan.

5. Stay on track

Make sure you check back on your financial plan at least a few times during the year. Update it each time an event has passed or a goal has been achieved. Repeat the budgeting activity at least once so you can update your sources of income and hopefully any reductions in your outgoings.

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The information contained in this article has been prepared by Bank of Ireland (“BOI”) for information purposes only and is not meant as advice. BOI believes any information contained in the article to be accurate and correct at the time of publishing.
Bank of Ireland is regulated by the Central Bank of Ireland