Got money goals? Here are 5 financial habits that will help you achieve them.
Your finances are like the food in your fridge: if you don’t take a good look at what you’ve got in there every once in a while, there’s a chance things could turn sour. But there’s no better time to keep track of your money than the start of the year and budgeting doesn’t have to mean keeping an iron-clad fist around every dollar, it’s really just about creating better money habits that promote financial fitness. Here’s a couple of ideas on what you could do differently in 2021.
Prioritise your debts
This one’s not much fun, but when you commit yourself to getting out of debt you’ll reduce the amount you pay in interest. You’ll be able to spend the cash you would have spent on repayments however you like! Hauling a large sum out of your account and putting it towards your debt can feel overwhelming, so set up a realistic payment plan and don’t touch this dough, no matter what. As well as giving you more financial freedom and stability, being debt-free is liberating in that it could be easier for you to apply for a Virgin Money credit card and home loan down the track.
Check where your money’s going
If you routinely look at your bank balance and are left wondering where it all went, now’s the time to find out. There are lots of budgeting apps out there that offer options to help you set spending limits and reminders. Seeing exactly how much you’re forking out for Uber Eats might sting at first, but in the long run you’ll come out on top. Don’t forget to keep your eyes peeled for the new Virgin Money App launching 2021!
Work out your essentials
It is important you make sure the bulk of your spending’s going towards what you need. Write down one list of necessary spending categories, such as groceries, bills, transport and healthcare, and one list of anything that falls outside it, such as entertainment, eating out, clothing and electronics. Of course, don’t go cold turkey from all creature comforts or you’ll set yourself up for failure. Create an achievable budget each week to spend on the non-essentials and tell your friends or family what your plan is so they can help keep you in check. Should you lapse and a few fashion pieces weasel their way into your digital shopping cart don’t beat yourself up about it – carry on with your spending plan.
Check your calendar
The amount we spend varies from week to week depending on our social commitments. When we don’t factor in these financial ‘surprises’ we find it harder to fund them, which is why proactive planning is a must. At the beginning of each month, write down every potential wallet-draining event and budget for it. These might include family coming to town, birthday parties, potlucks or seasonal events. Make sure you consider expenses for food, drinks, gifts (which you could cover with your accrued points on the Velocity Rewards Store), transport and entertainment. If you’ve already got a solid weekly or monthly budget worked out then you won’t need to reinvent the wheel, simply reallocate some of your month’s spending into your social calendar.
Review your budget
Be honest. It’s unlikely you nailed it on the first go, and besides, life changes all the time. When you’re setting up your new budget at the end of each month have a look at where you spent too much or too little and make appropriate adjustments.
Budgeting will probably take you some time to get the hang of, but once you’ve cracked it you’ll be able to make the most out of your cash flow in 2021. Go for gold!