Now that the festive season is over and the New Year is in full swing, many of us will have found that our cash reserves are a little lower than expected. Thanksgiving, Christmas and New Year’s Eve, along with the inevitable parties, gifts and travel costs that accumulate at this time of year, may have left a dent in your savings. Stores and businesses know this only too well, so they will try to tempt us all to keep spending with discounts and sales throughout January. However, your seasonal spend could damage your longer term financial plans if you don’t set yourself back on track quickly. Here are three tips to help you rebuild your cash buffer and polish your portfolio for the coming year
1) Adjust your Budget:
Many of us rely on a budget that accounts for an average spend per month. Checking what you have spent in the more costly months and applying that to your projections for the following year can help you tighten the purse strings at less expensive times of year and keep your savings constant. A fluctuating monthly savings target will make sure you have extra funds available when needed in the future and save extra cash when times are easier.
2) Priorities Outgoings:
There might be some great bargains available in stores at the start of the year but if you are left with a credit card balance at the end of the month then interest and charges could very quickly negate any savings you might enjoy at the checkout. Make sure everything is paid off before any fees can accrue and if you do need to restrict your spending, it should be the luxuries that are cut out, not your savings and investments. Give the credit cards a rest for a bit and focus on the longer term costs and gains.
3) Take Advantage of the Markets :
TVs and furniture aren’t the only things that can be found for a cut price in January. Historically, global markets have tended to drop in at the beginning of the year. A well-managed portfolio should take advantage of seasonal trends as well as longer term patterns. If your portfolio is actively managed then this should be done for you. If you are making all the decisions for yourself then there are bargains to be found in January stock markets. Retail, financial, leisure and other stocks may well dip and re balancing your investments at the start of the year can accelerate your gains during the rest of the year.
The festive season is a time for celebrating with family and friends. There will always be extra costs associated but those don’t have to pose a risk to your financial goals. Understand what’s coming and know how to bounce back and you’ll be celebrating later on as well.