15 ways to manage your finances in the new year

Did you know that we cannot effectively change our lives without considering the financial implications?

I believe we have the power to totally transform our lives, but I also know we cannot do this in a silo. Financial management must be a key part of that process, which is why I continually share personal finances tips with you.

Over the last few years, I have read some incredible personal finance resources, from blogs, to books and even social media posts.

One of the first personal finance blogs I fell in love with was The Simple Dollar by Trent Hamm(no longer available). His blogs featured practical tips on how he and his family were saving more, spending less, and earning more.

He also shared many of these tips in his books, ideas like buying generic brands, using coupons, and even using cashback apps, even down to the last cent. Yes, he was that granular.

It’s been a few years since I read any of his resources, yet I still hold on to some of the principles he shared.

My hope is that the post you’re about to read will hold some timeless tips and principles you will find useful now and in the future. That years from now, you will continue to adopt and implement some of these tips.

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15 UNUSUAL WAYS TO IMPROVE YOUR PERSONAL FINANCES THIS YEAR

1. Decide to improve your finances.

“You don’t have to see the whole staircase; just take the first step.”

Martin Luther King Jr.

Any journey into money management must start with a decision to do better with your finances.

This may seem like a no-brainer, after all we all want to use our money well, but you will be surprised how this simple decision can change things. It wasn’t until I made the decision to be more mindful with my finances than I began to see noticeable results in how I spent money.

2. Spend less than you earn

“There is a gigantic difference between earning a great deal of money and being rich.”

Marlene Dietrich

One of the most common personal finance principles is to spend less than you earn.

This is because spending less than you earn is the only way you can accumulate and sustain wealth.

Even if you earn a lot, win the lottery or enjoy a windfall, the principle still remains. You have to spend less than you earn to keep what you earn.

3. Create a budget and stick to it

“A budget is telling your money where to go instead of wondering where it went.”

John C. Maxwell

Don’t panic! This is not a call to get swallowed up in spreadsheets and analytical tools. A budget is simply a periodic plan of your income and expenses. Basically, it can be as easy as writing out what you earn and what you spend (want to spend) on a piece of paper.

For me, I created a basic monthly spreadsheet for my expenses. I divided my budget into two buckets – the estimate income and expenses, and the actual income and expenses. This helps me review my progress at the end of each moment, while also reflecting any new or forgotten expenses in the next month.

Find a method that works for you. You could also check out these budget templates by some personal finance gurus.

The great thing about a budget is that it creates more awareness about our spending and it also helps build our discipline.

Remember that it is harder to keep a check on your spending if you don’t have a plan.

4. Find ways to Save

“The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.”

T.T. Munger

There’s almost nothing more to add after reading the above quote. But I will say this, deciding to save was truly a game changer for me. Once I hit my savings target for the first month of this year, I was buoyed to continue and even increased my target.

One helpful tip I used was to set up a direct debit from my checking account to my savings account. My bank (Revolut) also allows me to round up the change from my expenses, which are then transferred to my savings account. To ramp up this amount, I set it to double the change.

5. Increase your knowledge about Investments

“An investment in knowledge pays the best interest.”

Benjamin Franklin

Investing is a means of building on what we have. A key principle that underlies this is our willingness to learn and research. This is not about get rich quick schemes. I believe investing takes a lot of wisdom and patience. We have to be willing to play the long game.

“Building wealth is a marathon not a sprint. Discipline is the key ingredient.”

Anon.

What do you know about investing and the different investment opportunities out there? Perhaps, it’s time to find out more about the stock market, real estate opportunities, investments in other businesses, and even in cryptocurrencies, which are a bit more technical.

Ultimately, the biggest investment we can ever make is in ourselves. In building our capability and our resilience.

6. You deserve nice things, but not all the time.

“The way to stop financial joyriding is to arrest the chauffeur, not the automobile.”

Woodrow Wilson

I’m not a sadist (I promise), but I have learned how dangerous it is when we try to justify our purchases by claiming we deserve certain things. This is a precarious slope that will only lead us to ‘spendville’.

Spendville is where our best laid plans fail on the back of emotional and senseless shopping.

The thing is that it is so easy so justify a want.

Following the aftermath of COVID, it felt like every “normal” moment should be celebrated. But that’s not how this works.

There should be room for spending on our wants, but this must always be within reason. Practice delayed gratification, knowing that money saved and invested now will be worth so much more to future you.

7. Know your priorities

“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.”

James W. Frick

Money is a means to an end not the end. I constantly remind myself of this as it is easy to believe it’s all about having a fat account balance. Money enables us to do things that matter to us and the people we care about. It enables us to be a blessing to others and to leave a meaningful legacy.

Money is a tool just like our education, our skills, and our character. We can use these bouquets of resources to live a fulfilled and purposeful life.

8. Delete shopping apps and unsubscribe to newsletters

“He who buys what he does not need steals from himself.”

Swedish Proverb

This may seem drastic but for anyone that has ever unconsciously found themselves browsing through sales deals on the H&M App, or Zara app, you know how easy it is to buy, what you don’t need, with a click.

It is even worse when you’re inundated with emails about limited time offers, which are often couched as if you will be missing a once-in-a-lifetime opportunity if you don’t act immediately.

To save yourself unnecessary self-control battles just delete these apps from your mobile devices and unsubscribe from marketing emails.

9. Limit your monthly subscriptions

“Look everywhere you can to cut a little bit from your expenses. It will all add up to a meaningful sum.”

Suze Orman

Where are my Netflix/Prime/Disney/AppleTV gang? Lol

I imagine there are quite a few of us. It’s so easy to get caught in these entertainment subscriptions. At one point, I paid the Apple Music $9.99/mo. subscription for a year before I realised, I could listen to many of the same songs for free on Spotify or Youtube. $9.99 may not seem like much but these costs add up, quickly. Especially where you are paying for similar services.

Trying to decide what to cut? Here are a few questions you can ask:

• Why did I sign up for this service?
• Am I getting the benefit of this service?
• Is the benefit congruent with the cost?
• Is there a free or better priced alternative?

These questions are applicable even if it’s a gym membership, a training platform or a food service. Ensure that you are gaining real benefits that trump the costs.

10. Start a Side Gig

An important way to build wealth is by increasing our streams of income. The millennial generation has often been called the ‘side gig generation.’ Experian records that 50% of millennials have a side gig. I don’t know how true this is seeing but it shows that many of us are not depending on one source of income.

But the fact remains that we can increase our earnings by considering other income generating opportunities. Before you decide on your next side gig, do consider the following:

• What resources do I need to set up and sustain the side gig
• Do I have sufficient interest in this area to be able to devote the time and resources required?
• How long do I want to work in this area etc.

For more on side gig ideas, check out this post where I share 10 side hustles you can start in one weekend.

11. Be a purposeful giver

“Give and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you.”

Luke 6:38

Over the years, I have seen the above scripture and other similar scriptures used as a means to get people to give. We may end up giving out of fear or in a transactional manner so that there’s an expectation of a ‘return’. But I don’t think that was Jesus’ intention when he made the above statement.

It is also interesting that the above scripture doesn’t even mention money even though there is a general congruence that it refers to money.

For me, giving is a spiritual exercise and I try not to be emotional about it. This is especially hard when you watch some heartrending ads from charities and NGOs. You know those ones with emaciated children who look like they have not eaten in months, their sunken eyes staring back at you. These are called “emotive charity advertising”.

It could also be the homeless people you see on your way out, sitting on the bare concrete in the freezing cold.

At moments like these, I ask God for guidance and one of the things I’m often reminded of is that our giving should not be restricted to money. There are times when we absolve ourselves from the issues around us because we believe we gave $10 to UNICEF or $5 to the beggar by our street. I don’t think it ends there. This is your call to give mindfully – of your time, money, and resources.

12. Create a meal plan and dine in

I have found, time and again that most of my money is spent on food. And even with the best laid plans, things often go awry when I eat out or order in. You may decide you will not go beyond a certain amount but find it difficult when it’s time to order. To combat this, I try to limit opportunities of eating out or ordering in.

This also means that I eat more home cooked meals we use a meal plan to limit having to make too many food choices. I know this may not work for everyone, but you can find what works for you.

13. Avoid Impulsive and emotional purchases

“Too many people spend money they haven’t earned to buy things they don’t want to impress people they don’t like.”

Will Rogers

Do you find that you spend more when you’re sad, bored, happy or anxious? Perhaps you often use shopping as a form of therapy. You looked forward to the high of swiping your card or hear the ‘wush’ when your online order goes through. I can totally relate. There is almost that sense of achievement when you buy what you want or nab a “sweet deal”.

Spending on a whim or during moments of heightened emotions often means we haven’t thought it through, leaving us with unnecessary items and money down the drain.

To combat this, schedule your shopping and work with a shopping list. You can also take only as much money as you need for your shopping list. I have a bank account where I transfer my monthly expenses and nothing else. This makes me more aware of how I spend and the things I buy.

14. Try out a Spending Detox

“It’s good to have money and the things that money can buy, but its good, too, to check up once in a while and make sure that you haven’t lost the things that money can’t buy.”

George Lorimer

I have learned that our spending is often influenced by external forces. For many of us, these sources could be social media, the media or the people we hang around with.

While I’m an advocate of trying out a spending detox (or freeze), I also realise that such a detox will only be effective if we also counter the root cause.

If you find that the people you follow on social media or the things you consume – movies, music, YouTube videos – often lead to you spending more than you planned then it may be time to limit your exposure to these sources. You could try a 7-day, 14-day or even a 30-day social media/media detox and see how things go.

15. Settle your debt

“Every time you borrow money, you’re robbing your future self.”

Nathan W. Morris

Do you have any unpaid loans – student loans, credit card debt, or loans from family and friends? It is good practice to not only save but also to pay down our debt, even those we receive from loved ones.

Recently, I received a loan from a relative which I haven’t fully repaid. While my relative has not asked me for the balance, I know I shouldn’t take their kindness for granted. The responsible thing to do will be to pay it back unless they forgive the debt.

Start Implementing these tips today

The best time to manage your money, better, is today. Try out a few of these tips and see how things go.

And please share any other money tips that have worked for you. Thanks