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Managing Your Money in The New Year

When it comes to managing money, many people feel like there is a never ending cascade of information that can make them feel like Alice falling down the rabbit hole, to the point people can feel so overloaded with information and top tips they remain stuck in the same place, confused and afraid of making a mistake.

In this article, therefore, we’re going to take a look at how to manage your money in the New Year, in simple steps that incorporate broad principles and specific activities you can use to help better manage your money in the new year.I

Managing Your Money in The New Year


The first thing you need to do is to take stock of where you are right now.  List out all your cash assets (e.g. current account balance, savings, ISA’s) then your debts (credit card balances, bills and so on).

Next step is to look at the regular income you have coming in, and the regular bills you have going out.  This way, you can start to get to grips with where things are, so that you are in a more empowered place to plan.


There’s a well known quote that says if you fail to plan then you plan to fail, and whilst financial planning itself is at a tangent to this quote – it’s important to have some idea of where it is you want to be.  

The challenge is so many people, particularly if they are in a poor financial situation focus on where they are in a similar way to looking down at their feet rather than looking up toward the sun.  This can be a very depressing and self-defeating cycle, as it can be likened to the difference we feel waking up on cold, wet, miserable day versus that feeling when there’s a blue sky and the sun beating down on us.

It’s important to focus on a positive future, and believe that it’s possible to get to where you want to be.  The first step, in this process, however, is that you must define where you want to be.

The challenge here, is that many people say “I just want to be comfortable” or “I want to be rich” without getting specific about what that looks like.  So, what does “comfortable” look like to you?

Does it mean you won’t struggle with paying your rent, or does it mean you can afford six holidays a year — we all have a different idea of what  “comfortable” looks like, so define it on your terms.

The next step, after you’ve defined what you want in qualitative terms (i.e. experience terms) you now need to quantify this and attribute that experience to a financial amount of money.  

For instance, let’s say you want to live in a comfortable three bedroom house in a particular area and drive a specific model of car.  You can now work out how much the rent or mortgage payment is on that house (let’s say £700 per month) and the car payment required to acquire that specific car (let’s say £300 per month).

You can now start to see exactly how much money is required to be “comfortable” as per your description.  This is a very empowering exercise, as often we think a lot of our dreams are out of our grasp, yet when we break it down, you might be much closer than you think!


The next step, now you know where it is you want to be, is to build a bridge from where you are to that place.  This is essentially your “action plan”. The one thing you don’t want to do is get put off by the distance between where you are to where you want to be… as so many people do… instead, you want to build a bridge in terms of an action plan that crosses the chasm and walk the bridge step-by-step.

Progress feels amazing, and to be heading toward your destination, even one baby step at a time can feel a lot better than drifting in the tide or burying your head in the sand.


There are two forces that can help catalyse your progress in terms of getting to the destination you desire.  Saving money and earning money. When it comes to saving money, this doesn’t have to be as arduous as it sounds – and whilst many people advise tips such as saving money on cheap printer ink or getting the bus rather that driving, the first step in the process is to become more conscious with regard to what you are spending.

So often, particularly in the “tap culture” where we mindlessly tap our credit or debit card on a variety of devices to make purchases throughout the day, we lose connection with what we are actually spending.

In this sense, one of the best ways to get more conscious about what you are spending is to open a document in your phone and write down what you spend money  on each day, as you spend it – then, at the end of the week, review your expenses and put them into categories.

The results can be quite eye opening, and this one little tool can help you save more and spend less.

The next step, is to use cash rather than card, as there is something more tangible and emotionally connected about the feeling of handing over a £20 note or a £1 coin versus tapping your credit card.  

Also, this is a good way to keep to a budget, as if you start the day with a £20 budget, and come teatime you fancy splurging on a takeaway but only have £3.50 left… it simply means you can’t — or at least, you will register how much you have been spending throughout the day, as you reach for your debit card.  


The last thing, which is often overlooked when it comes to managing your money is to  simply earn more. Of course, earning money isn’t always “easy” but it is pretty simple.  All you need to do is provide value to a third party who is willing to pay you for a particular outcome.