With every new year comes new resolutions. We might be a little biased, but we think this is an opportune time to set some financial goals, or make some money-related resolutions. Maybe you have already started planning out your financial goals for the year, or maybe it isn’t something you have thought about before. Regardless of where you are in your wealth building journey, whether you are starting small or aiming big, coming up with resolutions (and sticking to them!) can help you get to your end goal. Let’s take a look at some potential money management resolutions you can commit to this year.
Create a Monthly Spending Plan
While a spending plan may not be an all-inclusive budget, starting by writing out all of your planned spending for the month can help you get an idea of how much you should be budgeting in each category. You may even notice some excess spending in certain areas once you have written everything down, which allows you to make adjustments as necessary.
Keeping Track of Spending
After you write your spending plan, it’s important to analyze how your actual spending lines up with it. You can do this by writing down every purchase you make, either physically in a journal, checkbook, or budget planning ledger, or by making note of it in your phone or on a budgeting app. By writing down your purchases every time you make them, you can see where you are straying from your spending plan, and where you may need to cut back a bit.
Stick to a Budget
Taking your spending plan a step further, you can create an all-inclusive budget. This takes note of every dollar you have coming in and going out, marking your expenses, how much they are, and when they are due, in addition to when you are getting paid and how much. (Don’t forget to note these commonly forgotten items!). Taking a big picture approach like this can help you plan accordingly and ensure that your spendings are less than your earnings, and that you have money you can set aside for savings.
Lessen Your Debt
Another great financial goal for the year is to make progress lessening the debt that you have. While it may not be possible to pay everything off in a year’s time, any amount of progress can be beneficial. Once you have a budget set, dedicate some money to go towards credit cards, mortgages, or any other outstanding payments you may have.
Don’t Increase Debt
This may seem pretty common sense given the goal we just discussed, however, not increasing your debt may be easier said than done. Using your credit cards can be tempting when you are cutting it close on bills, or you may rationalize that since you are making payments towards your debt, it’s okay if you use your cards. However, this logic is not sound, and you will end up working against yourself and your progress towards paying off your debt completely.
Save, Save, Save
Whether you are saving for something specific, or just need to establish an emergency fund, having a goal of saving money in general can benefit your financial situation. Evaluate your budget and see how much money you can allot to save each money (or each paycheck). Once money is in your savings account, be sure to leave it there and not touch it unless there is an emergency that you have no other way of covering the costs of.
We have already covered how to keep track of your spending, now the next step is to figure out where you can make cuts. Eliminating excess spending can free up some cash to accomplish your other financial goals, like paying off debt or putting money aside for savings. Sometimes spending is unavoidable, however, if you can avoid making frivolous purchases whenever possible, you may find yourself making serious progress in your financial goals.
Whatever your goals and resolutions are for your finances this year, having an expert advisor or wealth planner assist you can be beneficial. Contact our team to see how we can help you plan for not only this year, but your entire financial future, and what steps to take to get there.