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Personal Finance 2016: Guest Post from Kate

February 3, 2016

finance, lifestyle

We’ve been busy lately at the Money Lion Towers! We’ve been talking to some of the best finance writers online, and this week we’re delighted to host their ideas and opinions about how to manage our personal finances and private banking in 2016.

Today’s guest writer is Kate from .

Image by o5com via flickr

I’m not a fan of the term “New Year, New You”. Don’t get me wrong I’m no neophobe, I love change. In fact, I need it to keep me motivated.

However, I prefer to be more realistic and incremental with making any changes, especially New Year changes.

It’s no different with financial planning, be honest with yourself, this time last year, did you have good intentions that you failed to implement fully? If you did, it’s not just your personal finances that need an overhaul, it’s the way in which you approach change.

Don’t just write the same list that you did last year. Instead, analyse why you failed to follow through with the changes. Were they unreasonable in practice, did you just forget to do it in the new way? It’s for this reason that I prefer the term New Year, new perspective. You know yourself and how you work, tweak that rather than resolve to revolutionise yourself completely.

A small change that can make a big difference to your personal finances, is the implementation of amortisation. This is the process of spreading the cost of purchases over a number of months so that there are no large spikes of expenditure over the year. Companies use this process so that their books look balanced and predictable, as opposed to erratic.

Most of us have a steady monthly income stream, and the problem with having large spikes of expenditure in your personal finances i.e. when the money for that holiday leaves your account, is that this activity can take you into the red. Putting amortisation into practice is a matter of estimating the big expenses that you are going to have over the year, and dividing that figure by 12. Siphon that money away into a separate account until the money is needed. This makes your finances easier to predict, and will give you a better understanding of your true disposable income.

Kate Edwards is a saving fanatic and blogger from the unashamedly sexy realm of personal finance. Through , she helps readers to eat well, live well, and prosper.

What are your thoughts on personal finance? Do you spread the big costs or do you take care of it in one go? Tell us your story in the comments below!

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