For many people the new year is a prime opportunity to get their finances in order. In this article we take a look at a few simple steps to manage your finances effectively.
Buy
If you own a small business or work as a freelancer, the end of the year is the perfect time to invest in a big purchase; we know this may sound like bad advice, but it really is a great way to save money in the forthcoming tax year. Save money by spending it. However, a word of caution: check with your tax advisor or outsourced accounting services to ensure such purchases will lower your tax bill.
Don’t Be Scared
Our advice is to speak to your accountant way in advance of the end of the financial year; December is the perfect month to arrange such a meeting, as their workload is more manageable. This will put both you and your accountant in the best position to plan ahead for the next tax year.
Take Stock
The end of the year also offers a good opportunity to reflect on your financial goals. Perhaps you didn’t have any in place, and if that’s the case, don’t worry: you can set them for the following year as this one draws to an end. Speak to the experts, such as www.mushroombiz.co.uk/homepage/services/accounting/, and start setting realistic expectations.
Watch Your Spending
It goes without saying that budgeting is key. It helps you focus and gain financial control.
That Emergency Fund
Most people don’t have an emergency fund, but we recommend you build up to having one. That way, if and when disaster strikes, you have available money to avert financial catastrophe.
All in the Planning
Financial planning is one of those tasks that the majority of people put off. The way to avoid one month rolling into another with no audit taking place is to make time – the same day, the same hour, if this works for you – when you sit down and plan ahead.
Get Rid of Debt
If you have any debts, the most important thing is to get rid of them. Make it your number one priority for the coming year; pay off the smallest ones first, and you will be rewarded with an emotional win.
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