Many people include their finances in their new year's resolutions but frequently struggle to figure out where to start. Organizing your finances can seem like a daunting task, but it doesn't have to be! Below are five easy ways to get started this new year.
- Commit to getting your finances on track.
Many people want to start organizing their finances but begin to feel overwhelmed. This leads to prioritizing other goals over your financial goals. This year, commit to making at least one financial change to start your new year on the right track. One small change can lead to significant results, so don’t give up!
- Organize your net worth.
By organizing your net worth, you can get a quick glimpse of your financial health. Start with all your cash assets (checking accounts, savings accounts, retirement accounts, etc.). Then add in the value of your assets (cars, home, jewelry, etc.). After you have the total value of your assets, assess your debt. Whether it be student loans, a mortgage, credit card debt, etc., subtract your total debt from your total assets. This will give you an idea of your net worth.
- Set your goals and make a plan.
Many financial goals look the same: spend less, save more. While that is always an excellent custom to follow, a financial plan is more than just saving money. What do you want to do this year? Take a trip? Buy a house? Money is simply the tool that gets you to your goals. Don’t just set a goal. Set a plan. How will you buy that house next year?
- Record your budget.
Budgets can be scary to many people, but they don’t need to be. The goal of a budget is to ensure you are not spending more than you are making. Rather than using a budget, as a rule you can’t break, use it as a guide for spending. Setting a budget will allow you to feel in control of your money, rather than your money controlling you.
- Save, Save, and Save.
There are many opinions on what vehicles of saving are best, but there is a simple fact that everyone can agree on: regardless of your savings vehicle, just start saving. Whether it be $100 a month in a savings account or $1000 in an IRA, put that money away and save it for later. There is no wrong way to start saving, and the goal is to create a habit of not spending all you have.
If you are interested in hearing more of our financial new year's resolutions, reach out to one of our financial professionals today! We would be happy to help you start your new year off strong and help you get healthy financially.