How to transform your finances in 2024

Make this your year for wealth health by using this guide to transform your finances.

Assess your current situation

Before you begin bolstering your finances, assess your current situation. Look at your income against your outgoings, identifying your essential spending and how much you are managing to save. 

Consider any debts you might have as well. Typically you should clear debt from short-term borrowing options like credit cards and overdrafts as soon as you can for improved financial security. Long-term loans with fixed repayments such as mortgages can be paid off steadily while saving. 

Set clear financial goals

Next, think about what you’re trying to achieve. This could be investing in a significant asset such as a house or car, forming a nest egg for retirement or creating capital to put behind a business venture.

Once you’ve set clear financial goals, you can calculate the changes you need to make and a realistic timeline for getting there.

Ways to increase your income

Explore the different ways to increase your income to find the right path for you and your goals. 

Consider requesting a raise at work, and discuss the steps you need to take to move up on the career ladder. You could also investigate the option of taking on freelance work or starting a side hustle to help increase your monthly income.

Think about how you’re storing your earnings as well. Keeping some safe and secure in bank accounts, you could invest the rest in financial markets which offer the chance of more favourable interest rates. Options include investing in business stocks and shares, index trading which follows the the market as a whole and buying slow-burning fixed-income bonds.

Remember to set up a separate bank account for your savings. Keeping this cash away from your current account helps to prevent accidental spending and allows you to capitalise on the benefits of dedicated savings accounts such as ISAs which allow tax-free saving to £20,000.

Create a comprehensive budget

Once everything is in place, create a comprehensive budget to keep track of your finances. This should include your monthly income, offset against your various outgoings.

It’s best to split your outgoings into three separate sections: essential spending, savings and money for leisure activities. This ensures you stay in the black, stay on top of your goals and remain able to fund your social endeavours throughout the month. 

If you have investments as well, use a dedicated online platform to put together your portfolio so you can monitor and manage your various assets all in one place.

Build an emergency fund

Lastly, you must build an emergency fund alongside your other financial activities. You never know what the future will bring, and you don’t want sudden situations to derail your overall goals.

Each month, save more than you need for your targets and consider this extra cash your safety net in the event of emergencies such as a car breakdown, property damage or illness.

_

Mia's passion for travel extends beyond the pages of their writing. They are also an advocate for responsible and sustainable travel, believing that exploring the world should leave a positive impact on both the environment and the communities visited.