Put your Finances on a Diet This Year!
You’ve probably already forgotten your New Year resolutions, but when it comes to your finances you can still make this year the one when you go from money misery to financial fitness.
It’s never been a better time to make sure you’re on top of your finances. Get ready to follow our simple tips!
New year, new you
First of all you need to get to grips with your current financial situation.
Do you really know what your income and outgoings are? Most people have an idea, but now’s the time to get it all down with exact figures.
Use an app, spreadsheet or just a sheet of paper to note everything. Generally income will be monthly, but for expenditure check how often you pay each item. Don’t forget – if you still have a bank account in your home country to include those details too.
Still paying insurance for that washing machine you replaced last year? Paying a subscription fee for that magazine you never read? Having all the figures in front of you will help you see what needs to go.
Once you’ve recovered from the shock of seeing just how much you pay for stuff, decide to tackle one area every two months. For example you could slim down your expenditure on:
- Telecoms in February
- Utilities in April
- Credit cards in June
- (Take a break in Summer)
- Insurance in September
- Bank charges and currency transfer commission in November
Breaking everything down into bite-sized tasks makes it easier to complete. If you’re overwhelmed and decide to try and solve everything this month it will probably never get done.
We have info on how to save on most of your household bills – just use the search box at the top right to find what you need.
Keeping track of your finances
Do you get cash out of the bank regularly only to wonder where it all went by the end of the week/month? Or do you use your debit card for small payments but forget what they were for?
Find out by tracking all your expenditure for a month. And by all we mean everything! For card payments ask for the receipts to help you remember the details of each payment.
You may be surprised by how small payments can soon add up. Treats and splurges that aren’t in the hundreds of euros can easily be missed.
It’s time to purge those “nice to haves” (expensive coffees? taxi rides rather than taking the bus?). You know what they are, so downsize or go without.
Out with the old, in with the new
January is a difficult month for many people. The excesses of the holiday season lead to an inflated credit card statement (as well as the waistline).
But the overspend has already happened, so there’s no point wasting time lamenting. (And the same goes for the overeating!).
Make sure you can pay off the debt, or aim to pay it off as quickly as possible. Credit card interest rates are well over 20%, with many banks charging over 25%. If you have money in the bank earning practically 0%, consider using it to remove or reduce the outstanding amount on your credit card.
Stop comfort spending
Comfort spending is just like comfort eating, once the initial thrill has worn off the only thing left is remorse.
Nowadays with instant gratification just a mouse click away, it can be really hard to avoid spending. And this means your finances take an unnecessary hit too 😭
When shopping in bricks and mortar stores don’t head immediately to the till, walk around with your intended purchases and have a good hard think before finally deciding to buy.
If shopping online, avoid temptation by unsubscribing to newsletters from your favourite stores for a few months.
Ditch your fat cat bank
Did you know that we tend to be more faithful to our bank account than to our partners?
With dreadful interest rates, low levels of customer service and fees that are shockingly high it’s time to seriously question where your loyalty lies.
Not all Spanish banks offer online banking in English, but ask yourself whether it’s something worth paying over the odds for. For everyday banking your Spanish is probably more than good enough – so think about switching to an online bank with zero fees.
The same goes with currency transfers, for different needs use different providers. Read our dedicated post for more details.
Set up a new emergency fund
Blown it all over the holidays? If so now’s the time to set up a new emergency fund that really is for emergencies.
Set up a standing order to transfer from your current account every month just after your wage or pension goes in, leaving less temptation to spend it. Out of sight, out of mind!