Every New Year brings with it a fresh inflow of happiness and prosperity. The messages and emails bombarded for the first 2-3 days of the year are surely a morale booster to set new goals. But it needs a lot more discipline and dedication to become organised.
As the adage goes, “Resolutions are meant to be broken,” well, not anymore. If goal settings and resolutions are pursued with a reality check, executed smartly, followed with discipline, you can surely achieve most of them.
Treat this New Year as an opportunity to understand money matters better and focus more on the accounting perspective to make your finances shine by the end of the year.
In this article, we will talk about accounting resolutions that can help you become more organised and profitable this year.
I will accomplish my goals proper financial planning
You always wanted to achieve something last year but missed it. Give top priority to one of the most sought-after goals you carry forward from 2021 to 2022.
Whether you want to buy a new house, start a new business, develop a new product, or any other goal, it’s time to do it with better financial planning and execution.
Make a list of all the learnings from 2021, and based on it, make a list of changes you will incorporate.
Set smart goals and break them into smaller and feasible tasks. With better clarity of thoughts and more focus, you can perform better this year.
I will ensure to have an emergency fund
We are living in uncertain times and experiencing money crunch in one way or another. So, the most important financial New Year resolution is to SAVE, SAVE & SAVE.
It would not be easy in times of economic slowdown, but you can do it with proper planning and willpower and create an emergency fund. The mantra is to save small amounts every month rather than committing to large, unrealistic amounts.
Having regular monthly commitments for retirement planning is also equally important. As they say, “Do not save what is left after spending, rather spend what is left after saving.”
I will keep track of my receipts and transactions
During tax season, one of the main reasons for anxiety is to dig through all the boxes of receipts or invoices, which are required for tax documentation you send to the HMRC.
When you do self-assessment tax return or submit your corporation tax, you need to attach receipts, invoices, transactions, expenses, etc.
Be organised all through the year to retrieve the important documents easily. You can do it manually or install bookkeeping software.
I will clear my loans and will use a debit card instead of a credit card
As you know, interest rates in the UK have just risen, and the predictions for 2022 also give hints to further hikes. So, if your budget allows, sit with your loan expert and pay off your loans. A single payment is always done at a potentially lower interest rate.
The interest rates on credit card bills are very high. This New Year, make it a habit to use a debit card instead. This will enable you to check your spending and save extra money you are paying to the service provider as interest.
I will learn about my tax benefits to reduce my tax bills
Most contractors, sole traders, and freelancers are good at making money but are not aware of all the benefits, allowances, and reliefs they are entitled to. So, they end up paying more taxes.
This new year, make it a point better to understand the rules and regulations of IR35 of the HMRC.
With the help of an expert, you can save good tax money. Get expert tax advice to be aware of all opportunities to save money.
I will reassess my annual premiums and subscriptions
There are so many utility providers and services like a broadband deal, digital TV subscriptions, mobile phone contracts, home insurance, life insurance, and car insurance, plus many others, for which you are paying premiums without even knowing.
This year, make it a point to do some research and comparisons to get the cheapest price match. And discard those subscriptions which are only adding to your expenses and have no value addition to your lifestyle.
I will not keep all my eggs in one basket
Another important lesson that the pandemic has taught everyone is having multiple sources of income. So, this New Year, be open to all opportunities coming your way. Expand your portfolio – add more clients and more project contracts.
I will upgrade and encash my skills
Investing in training and development creates a big difference to your overall personality. For holistic professional development and sustenance of growth, you must enroll in programs that expand and upgrade your skill set.
With added certifications and specialised courses, you can ask your employer for a raise, and if you are a freelancer, you can ask for higher rates.
Also, by adding new skills, you can offer new services, which can help you reap good rewards.
I will claim all my expenses
If you are a professional associated with a company, you must claim all your business expenses. It is a great approach to keep the cash flow moving.
You can claim your expenses from stationery and computers to software and some forms of travel. This additional money is surely going to add to your financial planning.
I will make a monthly and annual budget
Setting a monthly and yearly budget is crucial for financial planning. It is advisable to have documented details of income generated and expenses done of the previous year while setting a budget for the New Year.
Keep things simple and be realistic. Also, calculate the percentage rise in expenditure due to inflation and plan accordingly. Ensure your expenses do not go out of your budget.