The Time to Plan your Personal Finances for 2023 is NOW! – 10 tips to master your personal finances from today.

The Time to Plan your Personal Finances for 2023 is NOW! – 10 tips to master your personal finances from today

The tinsel has been put away in the attic, your once-full cupboards may look a little bare and your New Year resolutions list has been completed. Now that Christmas and the New Year have passed, it feels like a good time to think about planning your personal finances for the year ahead.  

Perhaps getting in control of your personal finances was one of those resolutions? It’s so easy to spend more than you budgeted for over the festive season. Everyone is feeling the pinch and it may seem that getting on top of your personal finances is out of your control. However, even though there is a cost of living crisis, it doesn’t mean a plan isn’t appropriate – in fact a plan is even more important! 

Knowing your finances and getting as much control over them as possible is crucial.  By having definite plans in place, you are more likely to stick to them rather than just hoping and praying that your finances will be better later this year. 

What Do You Want To Achieve With Your Personal Finances?

This is a crucial starting point to getting in control of your personal finances and you need to take time to think about this before you set any plans. It will help with your motivation in sticking to any plans in the next 12 months. Think about the short and long term.  Obviously, your age will impact on any decisions you make and also whether you are in a relationship or have a family.

Make a list of your priorities. What do you want to achieve with your personal finances? Do you want to save for something big like a deposit on a house? Is your priority about going on holiday next year? Do you want to start a pension? Are you wanting to get out of debt?

What is your current financial situation?

Before you go any further and start to take control of your personal finances, you need to know where you are now.

Think about your current finances:

  • Do you have healthy finances?
  • Are there any gaps in your financial planning? Do you have things like ‘update my will’ on your list or ‘set up an ISA’?
  • Do you know what you want?

What do you want your financial situation to be?

You need to know what you are aiming for in your personal finances.

  • How much would you like to be saving each month?
  • What goals do you want to achieve?
  • When would you like to retire or start to work less?

What do you need to do to get to this position?

Once you know what you are aiming for, now it is time to ask yourself some questions on how you will get there.

  • Budgeting – It is always a good time to be budgeting, and even more so this year – sooner rather than later
  • Pension – Is starting to make pension contributions on your list? Could you set up a meeting with a Financial Planner?
  • Will – Does your will need to be updated? Have any had any changes to your circumstances?  Should you consider setting up a power of attorney?
  • Debt – Do you need to sort out your debt? If you do then be honest with yourself and get a plan of action in place.
  • Saving – Are you saving regularly into your ISA? You will feel better if you build up an emergency fund.

10 Tips to take control of your personal finances now

Finally, list the steps you will take to plan your personal finances for 2023. It will help if you put dates next to each action, then you are more likely to stick to it.
  1. Organise your financial records by gathering everything together so it’s easy to find what you are looking for.
  2. Start to change your spending habits so you cut your costs and save more. Start small by making small changes such as cooking more at home and not buying take away coffees or cancelling a subscription you no longer use.
  3. Back to my first point – what do you want to achieve with your personal finances? Set goals to give you clarity and focus.
  4. Set up a budget and keep it up to date. This is a great way to plan how you’re going to spend and save money. If you like using apps then there are lots of budgeting apps out there.  Have a look online and see what will suit you the best
  5. Start saving once you’ve cleared any debt. Have a current account and a savings account as you’re less likely to spend the money you have worked hard to save.  Also, it’s motivating to see your savings grow.  Transfer your savings at the beginning of the month.  Even if you can only save a small amount each month, you are starting to take control and it will make you feel better.
  6. Don’t forget your tax fee savings accounts. Remember you have £20k you can invest before the end of the 22/23 tax year.
  7. Start comparing the prices of your utilities, phone, mortgage etc and see if you can make any savings. I did this a few years ago with my phone and car insurance and was surprised with the savings I made.
  8. Remember you’re not on your own – it’s ok to ask for help. It may be that you are a business owner who struggles with managing your personal funds.  Could you ask your accountant for guidance?
  9. If you already have a work pension, could you increase your contributions? Even a small amount will help. This will save you more tax each month and help to grow your pension.
  10. Set up a personal account with HMRC so that you can find out your retirement age and also how many years of national insurance contributions you have made and whether there are any gaps.

Make 2023 the year that you take control of your finances and start planning for the future.  Remember, there are plenty of people out there who can help you, but the first step needs to be made by you.  Good luck!