February 2022 is a short month are you prepared financially?
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By Bromwich+Smith Staff | 973 words | Reading Time: 4 minutes, 21 Seconds | Date: 2022/02/22
February is a short month and short months can have a large impact on your personal finances. Even though rent is the same every month, there may not be as many work hours, making your paycheque a little smaller. You may not be completely ready for this February, so here are some ways to make sure that other short months don’t influence your finances.
All of our financial decisions and choices can have effects on our overall financial health, so it's important to be aware of our habits and how they could be improved. This is particularly helpful when it comes to short months like February, preparing for a “rainy day”, or trying to achieve specific financial goals like saving for a big purchase.
Being good with money is about more than just making ends meet. How you spend your money now will have an impact on your ability to spend later. Keep in mind the impact on your credit score and the cost of carrying debt. When you’re faced with a spending decision, especially a large purchase decision, confirm that you can actually afford it now and later. And make sure you haven’t already committed those funds to another expense.
That means reviewing your budget and balances in your checking and savings accounts to decide whether you can afford a purchase. Do you have a balance on a credit card or line of credit already? Remember that just because the money is there doesn't mean you can make the purchase. You also have to consider the bills and expenses you'll have to pay before your next payday. Paydays can be difficult to balance around without a financial plan in place.
Here are some elements to consider to be prepared:
Create a personal financial plan
- Understand your current expenses
- Save for future goals
- Plan for emergencies
- Prioritize spending and saving
- Try our free budget planner
- Know the difference between needs and wants.
- Needs are what is required for survival: food, shelter, healthcare, transportation, a reasonable amount of clothing (many people include savings as a need, whether that’s a set 10% of their income or whatever they can afford to set aside each month).
- Only after needs have been met then you can allocate discretionary income toward what you want.
- Reduce or eliminate unnecessary discretionary expenses where possible.
Start Saving Early
- The sooner you start saving, the better off you’ll likely be during your retirement years. Thanks, compound interest!
- Keep in mind the longer earnings are reinvested, the greater the value of the investment, and the larger the earnings could be.
Build and maintain an emergency fund
- Set aside money for emergencies.
- Maintaining this emergency fund can help you pay regular expenses if your income has been interrupted due to illness or job loss.
Bottom-line it’s important to consider the big picture and build habits that help encourage sustainable financial choices, ultimately leading you to true financial health. By following these overall guidelines you can start to feel more confident and secure especially when there is a shorter pay month or you simply want to treat yourself or your family to something special.
Actions to take today:
- Build a financial plan that can lead to your financial health.
- Budget your income vs. expenses, so you can spend within your means and manage lifestyle expectations.
- Start putting away money today for savings goals, including retirement, leisure, and emergency purposes.
If you are feeling financial stress and don’t know where to start, we’re here to help. With Bromwich+Smith you are never alone and we ensure that our expertise will leave you feeling hopeful and confident. Call our Licensed Insolvency Trustees today for a free, no obligation, confidential consultation 1-855-884-9243. Let’s see you flourish!