Should you plan a spending fast for the new year?

December 27th, 2016  |  Personal Finance

“Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.” -- Charles Dickens

The holidays are over and it’s the coldest time of the year now. You’re dreading opening up your banking app because you don’t want to see how much money you spent and how much money you owe on your credit card. It’s common to be down on your finances in January.

Should you plan a spending fast for the new year?

Yes.

During the holidays many of us lose track of our spending and our calories. With all of the holiday events going on, we forget all about our original goals of getting six pack abs or saving up for that dream vacation. We don’t feel the pain until January sets in and all of the holiday festivities are done.

How do you perform a spending fast?

I wanted to share with you the best system possible for planning a spending fast so that you can get your finances back on track:

1. Automate your savings first. Go to your employer or your bank and ask them to automatically deduct the money from your cheque. This will make saving money easier. We don’t always have the willpower to manually save money.
2. Only buy the essentials for a month. Wear what you have and make use of what’s left in your kitchen.
3. Make use of what you have around the home. You have some Christmas gift cards? Some ingredients in the kitchen? Use them up.
4. Set an end date. You can’t cut out spending forever. Set the date and work towards your goal.

How can you take inventory of your finances in the new year?

Now that you’re ready for the spending fast, it’s time to start thinking about how you can improve your current financial situation.

• Track your spending for the month. Since it’s cold out and you’re likely staying in more often, you can spend some time on this task. You can easily check your balance online to see where your money’s going.
• See how much you owe. How much do you owe? Tally up your credit card bills so that you can figure out how much money you have to pay back.
• Set a goal. Do you want to be debt-free? Do you want to save $1,000? Set a goal and try to figure out how you can begin working towards this goal.

Nobody’s perfect. We all make mistakes when it comes to money. It’s easy to get caught up in the holiday spirit. This is why it’s important to take a step back in the new year to focus on your finances.