Wednesday, 6 January 2016

Planning the new year

Happy New Year!

A few days ago I sat down and made a rough financial plan for 2016. In columns representing each month, I placed all the major expenditures that I could remember in each column. This is a rough draft:

The plan is a nice reminder of what's coming up when. At least a few times a year I get a horrible surprise when I realise there is an 'unexpected' hole in our account - usually a car related expense that 'I could have sworn was done just a few months ago'.

Most importantly, its allowed me to plan our cash flow across the year. At the bottom of each column I've pencilled in a rough figure for expected outgoings. The summer and winter months are looking to be particularly expensive, but knowing this in advance,  I have time to put money aside accordingly. I hope to use some thrifty ingenuity to reduce the figures a little too.

An annual budget plan can be as elaborate and detailed as you like - scribbled on an envelope or typed into a spreadsheet. You can even break out the parchment and calligraphy ink if you really want. As long as you look at it frequently and use it to plan accordingly, then its doing its job.  Some things that you might want to include:

  • Annual renewals for insurance, warranties etc.
  • Vehicle maintenance - MOTs, insurance renewals, service.
  • Medical - dental, opticians, vet checkups. 
  • Christmas, birthdays and other expensive celebrations.
  • School expenses - back to school expenses, club subs, trips, bench fees. 
  • Dates for tax returns, account switching,  utility switch dates, tax credit renewals etc.
  • Holidays and booking dates.
  • Planned house maintenance - new roof/kitchen/extension/window.
  • Increased general spending ie. high energy bills in winter months.
Your plan may look a little daunting, or even terrifying, but don't despair. Knowing where you are is the first step to making it better, even if the second step is a good cry.

I hope 2016 brings better than 2015 for us and for everyone, but wishful thinking won't pay the bills or make dreams come true. A can-do attitude and a plan to make the most of it, whatever it may bring, is a much better way to begin a new year.

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