With the holiday season fast approaching, it is easy to get caught up in the spending trap and feel the pressure to get on the spending bandwagon.

I recently read an article in the Guardian by Michelle McGagh entitled “My year of no spending is over – here's how I got through it”. Michelle McGagh is a personal finance journalist who challenged herself to live on just the bare essentials for 12 months. She says “Embarrassingly, I have realised how much money I’ve squandered down the pub, in restaurants and through mindless shopping”.

To cut down her expenditure, Michelle opted to ride her bike instead of paying for fuel or public transport, she camped at inexpensive or free camping grounds instead of paying for holidays, she was mindful of the necessities in her weekly grocery shopping and in the process paid a substantial amount off her mortgage from the savings.

I’m certainly not suggesting that you need to be quite as extreme as Michelle but I believe that everyone can benefit from a review of their spending habits. I have found that the key benefit of working through a financial planning process is to devise a plan and set a budget with some disciplines around spending. The impact of savings from this can be much greater than you think.

The savings that you achieve can even outweigh the initial investment returns achieved from various financial investments!

The same methodology works for small businesses too. Having the financial discipline of monitoring expenditure against a budget enables you to think and consider carefully before committing to expenditure. A budget which limits the amount of money spent in certain areas can allow funds to be allocated into a special reserve designated for new business opportunities and future business growth.

As we come to that time of New Year’s resolutions, I encourage you to consider the current financial position of your business and how you can benefit from planning or improved disciplines that will bring benefits for many years to come, and ensure your small business maximises its chances of prospering.

Get in touch with us at Platinum Accounting & Taxation 03 9746 6479, and let us help you formalise your plans and strategies for your business. We are small business specialists and we can help you start out strong in 2017.