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Wouldn’t it be amazing if 2012 is the year you get on top of your finances, get out of debt and save some serious cash? We’ve put together 5 practical tips to help you get started.

1. Need versus want

You’re at the shops, and there’s a pair of shoes that you love. Well, you really like. But they’ll go well with that dress you’re planning on wearing to that wedding next year. Except you know you’ll probably buy a new dress by then.

Sound familiar? Learn to ask yourself “do I need this…or do I just want it now?” We often make impulse purchases just to give ourselves a pick-me-up, to get over the Monday blues, or because we’re hooked on bargain hunting, but you’ll feel much better about yourself if you’ll come away from 2012 with savings and less debt.

2. The scary savings rule

Most financial experts say that you should have six to 12 months’ worth of expenses put aside in savings. I know what you’re thinking: but my monthly expenses are huge!


Instead, aim to put away three months’ worth of expenses. This will put you in a much more secure financial state. So how do you work out how much to save? Read on…

3 Work out your monthlies

By monthlies, we mean monthly expenditures. Add up how much you spend on your:

* mortgage/rent

* insurance (home, car, health)

* utilities

* phone/TV/mobile

* food

* transport (fuel/public transport)

* entertainment/gym

* credit card repayments

Take a deep breath. Now you know once and for where your money goes. And seeing it spelt out like that (“I spend how much on my mobile!?”), you’ll spot ways of trimming back those expenses.

4. Just say no

Friends calling you up wanting to meet for drinks? Those ‘couple of cocktails’ end up costing a pretty penny. Learn to say ‘no’ is actually saying ‘yes’ to yourself: yes to your financial independence and security in the future.

It doesn’t mean you have to stay at home eating beans on toast, but you just have to learn how to be a fun, cheap date. We’ll have lots of budget entertainment ideas coming up in the next few weeks.

5. Have a plan

What would happen in your car broke down? Or your pet got sick? These unfortunate incidences happen when we least expect them. Ask yourself: how would you pay for an unexpected, big ticket expense?

We know how to save for holidays, or that new handbag, but we also need to have money put aside for the less-than-fun stuff. Plan for that emergency payment, and hopefully you’ll never have to use it.

How do you save? The best tips will make our next financial round-up helping our readers become money-wise in 2012!