Today’s post comes from Good Nelly, who has been on her journey to financial freedom for more than a decade. If you’re new to the finance community, or just need a refresher on some helpful strategies, read on for ideas to get prepared for the New Year!
New Year! The name signifies lots of enjoyment, holiday cheer, vacations, spending time with friends, festivities, and more. A new year also reminds us of making resolutions, and there should be at least one financial resolution among them. Check out some tips on how to set a solid financial plan for the new year:
Make a Budget
Making a realistic budget is probably the most difficult task for a lot of us. Look at your spending to get an idea of where you need to improve. This will require some trial and error, and you’ll have to revisit your budget occasionally and make modifications as needed.
Set Short-Term Goals
A few ways to make progress in your finances will come from setting clear goals. This will help keep you motivated on your journey. Suppose you have a goal of saving $3,600 at the end of the year. While this is a long-term goal, the short-term goal would be to save $300 every month.
If your goal is to pay off debt, make a plan and start working towards it. If the amount you owe is high, set goals throughout the year made up of small increments.
Plan for Retirement
Retirement planning is important, regardless of how much you earn. If you start early, you can take advantage of the compound interest, you’ll have more to live on when you retire, and you won’t have to depend on Social Security. Sounds good, right?
Start an Emergency Fund
An emergency fund is another important part of financial planning. If you don’t have one, start saving ASAP. Ideally, you’ll want to have about 5-6 months worth of living expenses. Try to save at least 10% of your monthly paycheck for your emergency fund. However, if it’s not possible to contribute that much, start with as little as 3-5%.
Create a Debt Repayment Plan
Too much debt can be a stumbling block when trying to get on your feet financially. If you have debt, setting a repayment plan should be one of your top priorities. Set aside money for savings and retirement, but also make a plan to tackle unsecured debts like credit cards, personal loans, medical bills, etc.
Set Up Automatic Bill Pay
Automated bill payments may be a good option if you often forget due dates. It also saves time on manually making payments. Check with your bank or credit union to find out what bill payment options they have available.
Don’t Overspend During the Holidays
Financial planning is something you want to have in place during the holiday season to avoid overspending. Spending too much during the holidays can lead to a new year filled with new debt. Make a conscious effort to keep spending low during Christmas and New Year’s.
This doesn’t mean you have to compromise enjoying yourself. Doing things like decorating, cooking family recipes, and hand-making gifts, are a few ways to have fun with your loved ones, without spending a ton of money.
If you follow these steps, you can start your new year on the right track, with less stress and no debt!
Good Nelly is a financial writer who lives in Milwaukee, Wisconsin. She started her financial journey in 2007, and has been associated with Debtconsolidationcare.com for 9 years. Through her writing she has inspired people to overcome their debt problems and solved their personal finance based queries. She has contributed to other websites/blogs like Camp Fire Finance, XRAYVSN, Diana On A Dime, Peerless Money Mentor, and many more. You can contact her at: [email protected].