It involves looking for ways to save more and ensuring that you are doing so for the things that matter to you.

The word detox can be quite daunting especially when the goal is to start the year with a clean slate. Yet more so than before, people are looking at detoxing and simplifying their lives by reducing the clutter and focusing more on themselves or their family, and ultimately looking at achievable goals that will best suit them.

Financially, it means looking at ways to save more and making sure that you are saving for the things that matter. Last year was a tough one for everyone, but it was a year that taught people to reflect and look ahead with much positivity and enthusiasm. While many may feel quite strained financially after the festive season, we do believe that there are ways to manage this.

A financial detox is a type of ‘cleanse’ that will guide you in getting rid of those unwanted spending habits and help you to develop sound spending habits. It forms the basis of all financial discipline and will leave you feeling emotionally lighter.

Sometimes our conscience gets the better of us, especially when we overspend or splurge on items that we don’t actually need. Detoxing yourself financially will help you ascertain what your ‘needs’, ‘wants’ and ‘requirements’ are – and will be your stepping stone to financial stability and freedom.

A financial detox is a type of ‘cleanse’ that will guide you in getting rid of  unwanted spending habits

Here are a few steps to help you get started.

Start with a plan

Plan your year with a detailed calendar. Highlight where and what you will be doing, get the estimated costs. This will give you an idea of where you need to budget and limit your spending. Also remember that you will need to save a bit extra to cover some annual expenses, like school camps for kids or new tyres on the car.

Update your budgets

If you don’t have a budget, it would be good to start one now. Besides daily household costs, your budget should hold your entertainment, wardrobe, holiday and any emergency expenses. It is your ultimate blueprint that will help guide you through each month and year.

Goal-based mindset

Fuelling your budgets is well-defined goal-setting. Your short- or long-term goals will help you determine how much you need to budget for each goal.

Get help if needed

There is nothing wrong with asking for help. If you are unsure, seek help from a professional financial advisor who will guide and put you on the right path. They can also assist you to stick to the goals you have identified.

Spend in the right places

A financial detox doesn’t mean that you should stop spoiling yourself. Spend on the things you need and spoil yourself now and then. It’s good for your soul!

Review and refresh

Look at your budget and track what and how you have spent. This will give you an idea of where and what you need to cut back on and what you need to focus on.

Managing your finances can be stressful especially if you are deep in debt.
Your financial detox will not only provide relief on your pockets but also help your emotional needs as well.
So take that step and detox your finances – you will be grateful you did.

 

Source : MoneyWeb