Tackling your financial goals.
15 January 2024 | by Alex Cuff
This blog post was accurate when we published it - visit kroo.com or your Kroo app for the most up to date information
2024 has arrived, and how time flies. But as the days start to get (a little) longer, have you considered setting yourself some financial goals for the coming year and beyond?
Whether saving for something big, paying off debt or just looking to get into healthy financial habits, now's the time to put your plan into action. And with our brand new feature, Kroo Pots, about to launch, you’ll have the perfect tool to separate your savings and make your goals happen.
In this blog, we'll talk about some key tips and considerations for effective money management – take a look below.
Look back to 2023.
Before taking steps to improve your financial wellbeing, it's essential to identify the areas that need attention. Take a look back at the past year. What sort of financial challenges did you face? Were you prepared for any unexpected costs?
Having a clear understanding of your behaviour is key to setting realistic goals.
Set your financial goals.
Once you've looked back, it's time to look forward. What changes are you looking to make? Is there something you want to save for? Perhaps a house or a holiday? Or maybe you want to clear some high-interest debt you've built up?
It might feel a little intimidating at first, but once you've broken these goals down into smaller steps, it'll feel much more realistic.
Set your budget.
It all starts with budgeting. Not the most thrilling subject, we know, but when you have a goal to aim for, it's well worth the effort.
Spend some time creating a detailed budget of your incoming and outgoing funds. Write it down or create an Excel spreadsheet. Include your fixed expenses; these are your expenses that are the same every month (e.g. rent and bills), your variable expenses that may differ depending on the month (e.g. takeaways and clothing), and any savings you might already have.
Try not to start by being too aggressive. The key to sticking to your budget is making it realistic in the first place. If you give it a few months and it's not working, review it and adjust.
Create a rainy day fund.
Unplanned expenses happen. Your car breaks down, and there's a hefty bill. Or your dog gets sick, and insurance won't cover it—or even job loss.
By creating a financial safety net, you keep your head above water, so you won't have to rely on loans or credit cards in the short term. Kroo Pots is the perfect feature for this.
Restructure your debt.
Debt can be scary and feel unmanageable fast. But it doesn't have to be all doom and gloom. Take some time to review your outstanding debts, including credit cards, loans, and mortgages and consider your refinancing options. You might be able to pay down any high-interest debt by reborrowing elsewhere at a lower rate. This means you'll have more money left to save at the end of the month.
Review your outgoings.
We all have a selection of outgoings every month that we pay blindly. Think Netflix, Amazon Prime or a rarely used gym membership. But if you think you can cull some of them, what are you waiting for?
And while you're at it, why not consider a side hustle? If you've got stuff you can get rid of, check out Vinted, Depop or Facebook Marketplace and make a little extra cash.
Take a look at your credit score.
The dreaded credit score... Be brave and take a look at yours. You'll find it can actually be really helpful when it comes to understanding your spending habits.
A credit score shows lenders how likely you are to repay a loan on time – based on your history of using credit and managing finances. You can improve your credit score by paying back on time, which may increase the likelihood of getting a mortgage approved. Missing payments has the opposite effect.
Think about your retirement.
For some of you, retirement might seem a long way off; however, future you will thank you for getting cracking with your preparations now.
Consider increasing your contributions to take advantage of employer matches or tax benefits. It really is never too early to start saving for later in life.
Ask for help if you need it.
Don't hesitate to ask for help when money worries weigh you down. Whether you're struggling to pay back debt or make ends meet, we're here to help you get a grip on your finances with support, suggestions and who to talk to.
You can talk to us in the app chat or visit our support page for more information.
It's all about taking control of the situation.
It might initially feel daunting, particularly if you've avoided the subject for a while. But there's something satisfying in taking your finances by the scruff of the neck and getting a handle on them.
Taking a proactive approach to your finances will pave the way for a more secure future. And remember, it's all about small, consistent efforts that can pay off down the line. Financial literacy is incredibly effective in money management, so spend some time learning how to make the most of your money now and long into the future.