Take things one step at a time…

Why it’s important not to rush into a financial fix

In life, we like to do things we enjoy because we know we’re going to have a good time doing them.

Contrast this with your finances. Many of us don’t review our money or what’s happening with it because we think it’s difficult, we don’t want to worry about our situation or we don’t know how to change things.

To protect ourselves, we shut it out of our mind and avoid it instead. Sound familiar?

When I’m faced with a job I don’t want to do, I try to set myself up for success. I’ll make the environment around me more engaging, play my favourite music and grab a cuppa.

Then I write down a list of the things I am going to do and how much time I will allow myself to work on each of them – because when I know there’s an end time, it doesn’t seem so difficult or like such a chore.

Try taking a similar approach with reviewing your finances. You may find it works better for you to allocate an hour a week for a few weeks than to sit behind your desk all day trying to make progress.

Firstly, decide what it is you want to achieve, and then schedule time for it in your diary.

In your first session, I’d suggest setting up the Bank Account System, which means arranging for all your regular bill payments to go out of one account, leaving another for all your variable spending.

That may involve opening a new bank account.

For saving an emergency reserve fund, you may also need to set up a National Savings & Investments account.

But once those two tasks are done, stop and have some fun. You can pick it up again on your next session.

Doesn’t sound like too much of a chore, does it? At your second session, you could review all your bills account payments and ask yourself: do I need this? Do I want this? If so, can I get a similar experience for less?

Ideally, you want to reduce these payments down to the essentials.

There’s a free downloadable worksheet at WarrenShute.com that you can use to help you plan.

Then, perhaps at your next session, you can look at maximising your income. Take a look at entitledto.co.uk to see if you’re eligible for any benefits.

Review your tax code to make sure you’re not paying too much tax and then look at starting up a potential side hustle or selling items you no longer need to boost your income.

I appreciate finance is a big topic and for many, it’s not the most exciting thing in the world – but the results of good financial planning are so exciting that it’s worth doing well.

Are you familiar with the saying, “Eat an elephant one mouthful at a time?” This means that if you break a big project down into smaller chunks, you’re more likely to succeed.

To learn more about The Money Plan visit WarrenShute.com or search for The Money Planner podcast.

The results of good financial planning are so exciting that it’s worth doing well