New year, new budget : 8 tips to start financially strong this year


If 2020 has given you money worries, you aren't alone. According to a study, it has been found that during the pandemic, people were just as anxious and stressed about their finances as they were about their physical health. Determining a budget could help you to create more peace and control. Whether you want to make your finances more transparent on an annual basis or want to create more order in your monthly expenses, here are some tips that could help you with that.

1. Determine your financial goals

You have decided for yourself that you want to be more conscious with your money this year. How do you do that? With measurable and achievable goals.

Instead of a fairly general goal, such as "I want to save more money this year," you could define a more specific goal. For example: 'I would like to save €10,000 to pay off part of the mortgage. In order to achieve that goal within 5 years, I have to set aside €166 each month'.

Write the following for yourself:

  • Make your goals What do you want to achieve?
  • Determine the costs. How much will that cost me per week/month/year?
  • Determine the time course. When do you want to have reached your goal?

Once you've made your financial goals transparent, you can work towards them and determine your budget. One goal will have more priority than another goal, but that's okay. The first step has been taken!

Your first savings goal is an emergency fund. An emergency piggy bank is nice to be able to fall back on. You never know when a washing machine or something similar will break. "If you don't have an emergency piggy bank yet, now is the time to start saving, says Jenny Harp, certified financial trainer at The Financial Gym". She recommends starting with about three to six months of saving your expenses.

2. Think about what spending money means to you

We're not going to tell you that you can't buy anything that makes you happy. First of all, that's not feasible and not fun. Second, it could make you want to give up on your financial plans altogether if you've to be that strict. It must be fun!

Instead, focus on what expenses actually add value to your life. The coffee to-go on Friday is your lucky moment of the week. But are those monthly expensive car costs too? Wouldn't it be cheaper for you to travel by public transport, or to purchase an electric bicycle? Try to find a balance in this for yourself!

Also look at your fixed costs! Most people start cutting their flexible spending right away. But those monthly fixed costs can also be high! If your rent takes half of your salary, you could also look for a cheaper rental house. That way you also have more money left over every month.

3. Write down your entries and expenses for a realistic budget

Whether you keep track of your expenses and expenses in Excel, in a budget app on your phone or handwritten in a booklet: writing them down is clear and will even motivate you.

In order to draw up a realistic budget, you'll first have to make your spending pattern transparent. A good way to start is to categorize your expenses. You could divide your expenses into:

  • Fixed costs: rent, gas, water, electricity, insurance, etc
  • Flexible spending: groceries, clothing, leisure, etc

It might help your latest bank statement had to address to watch what you spend and where you spend it on. Once you know how much money is coming in and how much money you're spending, you can determine what you'll need per day/week/month to achieve your financial goals.

4. Automate your payments

Okay, so you've worked out your plans and set your goals. Good job! Now is the time to make sure your goals become reality and your money goes to the right places. You can easily achieve this by setting up automatic debits. If your financial situation changes, you can always change or stop the automatic payments.

5. Keep any debts manageable

Being in debt isn't bad in itself. It could be an aid to purchase or realize certain things that you could not have done without the debt. But being in debt can also hinder you from achieving other financial goals.

Do you feel overwhelmed by what you've to pay off? By means of refinancing and consolidating you could take back control.

  • Refinance: in short, this means that you review the terms of your remaining loan. For example, you could lower the interest rate or change the length of your loan.
  • Consolidate: This is the merging of multiple loans into one loan. You could qualify for a lower interest rate, and you only have one payment moment.

Depressed by your guilt? You're not the only one. Studies have shown that high debt can lead to a lot of stress, high blood pressure, physical complaints and even depression. Understanding how debt can affect your financial and mental health is important in setting your financial goals.

6. Don't be afraid to adjust your goals

If you've been working on your budget for three months, you might suddenly find that three coffee- to-go moments a week will make you even happier than one or maybe you'll change jobs, or move to another apartment. That could mean delaying or changing a financial goal.

Don't be afraid to adjust your goals throughout the year. Celebrate the months when you did achieve your goals and don't be disappointed if you've been a little too enthusiastic about online shopping for a month. We strive for progress, not perfection.

7. Learn about investing

When it comes to investing, time is money. In fact, how much time you invest in the market is more important than when you decide to invest. Why? This has to do with the interest-on-interest effect.

With the money you invest with your investment account, you accrue interest and on that interest you accrue interest, and on that interest you also accrue interest and so on. This effect could turn small amounts into large amounts years later! That means the sooner you start investing, the better. A small amount can grow in this way within decades. Of course, that depends a bit on the financial situation and the type of investment. A financial advisor can tell you more about this.

8. Ask for financial advice

Deepening your knowledge of financial matters and literature is certainly a good place to start, but for personal financial advice it's still wise to engage a professional. For example, with the Certified Financial Planner you can determine your budget and make a financial plan.

For example, you could get financial advice from a financial advisor. This also applies if you as an entrepreneur have been affected by the COVID-19 pandemic.

Build your budget

Determining your weekly or monthly budget is a good way to map out your finances and keep them in check. Make sure your financial goals are achievable and balanced. In addition, give yourself a moment of pleasure and pampering every now and then. Keep in mind: "do I really need this"? It's all about the financial balance. Have fun saving!

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