Put your Finances on a Diet!
You’ve probably already forgotten your New Year resolutions, but ensure you make this year the one where 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 with a pen and paper and follow our simple tips.
New Year, New You
On the first sheet of paper, 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.
On the paper (or use Excel), put 12 months across the top with income and outgoings down the left hand side. Then just jot everything down in the table. If you still have a bank account in your home country, 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.
Second sheet of paper: find out where all the cash goes.
Do you get cash out of the bank regularly only to wonder where it all went by the end of the week/month?
Find out by tracking all your expenditure for a month. And by all we mean everything! If you hardly use cash but pay with your contactless card, keep the receipts to jot down.
Surprised how little things soon add up? Treats and splurges that aren’t in the hundreds of euros can easily be missed.
It’s time to purge the money leeches (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.
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 using the Internet, 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 is it something that’s worth paying over the odds for? For everyday banking your Spanish is probably more than good enough to switch to an online bank with zero commission.
The same goes with currency transfers, for different needs use different providers. Read our dedicated post for more details.
Remember, the only loser when you switch accounts is your old bank.
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!