How to Shore Up Your Personal Finances in 2018

As each year comes to a close, people naturally take stock of their progress reaching personal goals. Financial concerns invariably come to the forefront, prompting many individuals to ask themselves, “How can I do a better job managing my money next year?”

Kicking off 2018 on the right foot may require you to make financial adjustments, so the early part of the year is the perfect time to tighten-up your personal finances and establish good financial habits for the new year.

Review Pensions and Investments

Effectively managing money calls for long-range vision, as well as daily dexterity with cash flow. Unfortunately, savings and planning for retirement are often pushed to the back burner, in favour of pressing near-term financial demands. Reviewing your pension and investments ensures you’re making the most of your money in 2018. And since time is your greatest asset, growing a nest egg, waiting too long to plan can have costly consequences for your pension pot.

For the best returns from your investments start early and keep an eye on your money’s performance, in case better opportunities are available for growth. When you’re unsure about rules and conditions governing savings and investments, tap money charities for up-to-date pension information and enlist professional help, if necessary.

Reduce the Cost of Credit

It is easy for credit obligations to get out of hand. With a couple revolving credit accounts, a mortgage, and a car loan on your plate, you’re already juggling a handful of repayment obligations, which is only the beginning for some debtors. If you haven’t taken a close look at your debt spending, you may be paying too much for credit opportunities.

Although debt is a natural part of healthy finances, there’s no reason to pay more than you should for access to the financing you need. Whether you’re in the market for a payday loan or a long-term mortgage, it’s essential to evaluate lenders online, before making costly commitments. And regardless of what you’re buying, using the right type of financing keeps costs down. In many cases, it’s high-interest revolving credit card debt causing cash flow problems, so using another form of funding typically results in savings, when compared to carrying a month to month card balance.

Streamline Your Finances

If you’ve accumulated individual pensions, ISAs and individual shares though job changes and investment moves, 2018 may be the perfect time to simplify your holdings. If you’re free to change, look at consolidating your complex portfolio into a single modern pension, which may be less expensive and easier to administer than your current approach.

Prioritise Spending

Sticking to your priorities plays a big role in effective money management – even when you have to make tough spending decisions. Life’s simple luxuries – travel, takeaway, and nights out with friends, sometimes get cut when long-range financial objectives place demands on your income. You may ultimately sacrifice some of these pleasures for the sake of the bigger financial picture, but before giving up the things you love, scour your budget for less painful ways to trim spending.

Are you leaving money on the table at the market, buying expensive food brands? Do you pay too much for energy? Is your mobile service draining your budget? Correcting these spending missteps may be enough to reduce your outgoings, without sacrificing. Saving on financial fixes such as better utility rates and affordable phone service is less painful than changing your habits, allowing you to continue enjoying the things you love.

Realigning your finances during the first quarter can help keep you on course for the entire year. If you are serious about doing a better job with your money this year, set your priorities, simplify your finances, and live within your means in 2018.

Paul graduated in 2001 with a degree in Finance. Since then he has gone on to work for several of the UK's most well-known financial institutions.

An avid blogger and a huge football fan, Paul is here to guide you through the ins and outs of personal finance and perhaps save you some money in the process!

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