How to make the most of your financial resources
Making the most of your financial resources is one of the key challenges many of us face. Deciding where best to allocate your income so that you can create the lifestyle you enjoy and reach those long-term goals.
It doesn’t matter how much money you have coming in each month, it’s about making those funds work for you and prioritising the correct areas of your life for financial spend. Here are some tips on how to make the most of your financial resources:
Define your goals
Take some time to think about what your goals are, both long and short term. These may be things such as:
- Eliminate debt
- Retire early
- Buying a property
- Starting a family
- Renovating your home
Short term goals
- Create a budget
- Reduce expenses
- Walk to work more often
- Stop using your credit cards
Once you have a list of your goals, prioritise them. What is the most important goal to achieve? Knowing what you value most will help you to create a financial plan and identify where you may want to concentrate your financial resources.
Create a plan
A financial plan is the actions you need to take to achieve your goals. From daily steps such as checking in with your bank account through to outlining your investment strategy.
That’s why it’s important to have your goals defined so that you know where you are headed and can then plan your route.
To make the most of your financial resources, you need to be aware of what funds you have available on a daily, weekly, monthly or yearly basis.
Consolidate all your income streams to work out how much money you have coming in. You may only have your monthly salary, or you might also receive income from investments, savings, state benefits, or a second job. If you are in a relationship, will you pool your resources to achieve joint or family goals, or will you keep your finances separate?
Once you know what income you have, you need to calculate your outgoings. Start with your core living expenses, these will be things such as:
- Rent / mortgage
- Council tax
Then look at how much money you have left. These are the funds you will utilise for all other areas in your life such as:
- Debt repayments
- Pension/retirement planning
- Emergency fund
Allocate your money to the various areas to create your budget – you can get practical help with MRA’s free budgeting spreadsheets and guide here.
A budget will help you manage your money so that you can live within your means while also highlighting areas where you could reduce your spending. You will be able to instantly see if something you desire is within your financial capabilities or not.
Have an emergency fund
Unexpected life events are what often derail our plans and cause our financial security to diminish. Without an emergency or rainy-day fund, you may be forced to use credit to deal with an unforeseen situation. Putting your resources under strain in the longer term.
Use the resources you have available to start building up a financial contingency that can be used if your car should break down or, more seriously, if you lost your job. Reduce your economic vulnerability and have peace of mind that you have easily accessible resources to deal with any challenges in the future.
It can be challenging to know where best to allocate our money to ensure that we are getting the most out of life. Dealing with debt and other financial worries can become overwhelming and often cause anxiety. It’s much easier when you have support and expert guidance.
A Life Centered Planner is a finance professional who works with you and your family to help structure your finances in a way that aligns with your values and goals. Ensuring that you are working towards a brighter future while also being financially prepared and secure.
They can help you understand the technical jargon that can often cause confusion and give you confidence that the decisions you are making are the right ones for your family. A Life Centered Planner continues to support you over the years so that you can make a real difference to your long-term financial happiness. Contact us for a free no obligation chat, to see how we can help you.