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Post-Festive Season Budgeting: Start 2023 on the Right Financial Foot
Exceeding your budget during the festive season isn’t unusual – as we’ve covered in an article in January 2020: Getting Back on Financial Track Post-Christmas. While many can eventually get on top of their debt, and financial stress and uncertainty about the year ahead isn’t unmanageable, but imagine how great you’ll feel if you take care of those issues early in the year – so, get your pen & paper ready for some budgeting tips. There are a number of practical steps you can take now that will go some way to ensuring you don’t struggle through 2023 in the red.
Sound financial decisions don’t come in the heat of the moment – rather they are made with careful and considered planning. The festive season is a great example of this, where running around to buy all of your gifts at the last minute can have a real impact on your finances, and undo any budgeting you might’ve done. Basically, don’t leave it until midday on 24 December to head down to the shops. The same goes for budgeting – it isn’t much good to leave it until you’re behind on all of your bills and really struggling to make ends meet before taking the time to get your spending under control.
Spend Within Your Means – and Know Your Limits
Back to the main point of this article – SET A BUDGET. Maintaining a budget throughout the year is ideal, but it is particularly important to recognise the potential strain of buying gifts, extra food, holidays, and other potential costs that come during the festive season. Now that we’re on the other side of the season, you may have noticed the impact on your hip pocket.
If you are already budgeting, now is a good time to review it. Incorporate your likely expenditure for the year (including this year’s possible festive season spending) into your budget, and seek places where funds could be reallocated or extra savings could be found. For example, assume you have a two week break over the Christmas/New Year period, and during the year you pay $35 a week for coffees. If your budget dictates that this cost is incurred throughout the whole year (not taking leave into account), then you can factor those two weeks’ worth of coffee money into buying other things – putting it towards bills, groceries, or tucked away for a family holiday.
The key here is to know your limits – understanding what you’re likely to spend, putting aside extra money into savings, and having a buffer for unexpected expenses. There are plenty of things that we all buy from time to time that aren’t essential, so be prepared to sacrifice a few of those to ensure you’re handling your money in the smartest way possible.
Be Honest & Be Thankful
The past few years have proven exceptionally challenging and unpredictable, so be honest with yourself about what you can realistically afford to spend. With that in mind, sensible spending and a healthy perspective on what is most important may be the best thing you can do for yourself and your loved ones this year – with added peace of mind.
How MP+ Can Help
The Wealth team at McKinley Plowman are passionate about helping clients make thoughtful, sensible financial decisions through sound financial advice and an ongoing advisory relationship. This approach has helped countless clients secure the wealth they have, as well as lay the foundations for growth. See what the Wealth team can do for you – call us on 08 9301 2200, or contact us here.
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