The holidays have come and gone. Now it’s time to think ahead to 2017 and the New Year’s resolutions we already have in our minds.
Think about it, New Year’s resolutions primarily deal with working out more often, eating healthier, and getting more sleep. While tending to your physical health is great, have you thought about making resolutions focusing on your financial health? According to a 2015 study by Northwestern Mutual, 34 percent of Americans have made no effort to plan for their financial futures.
We understand analyzing your finances and making a plan can seem like a daunting task, especially if you’ve never done it before. However, if you simply commit a weekend to going over what you’re doing now and what you want to do next year, you’ll be surprised at how simple it can be.
Need some help getting started? We have you covered! Here are some ways you can feel confident in your finances as you ring in the new year.
Know where you stand
It’s smart to begin this journey by taking a look at how you did in 2016 so you can determine what you need to change, or start doing, in 2017. Knowing where you stand gives you a basis and will help point you in the right direction.
How do you determine this? Take a pulse check on your cash position by analyzing your income, assets, credit, debt, mortgage/rent, etc. Another way to evaluate 2016 is by analyzing your tax documents as you get ready to file. It’s a great way to see what you might need to change in 2017.
Bonus Tip: If you get a tax refund, that can be a great way to jumpstart a savings plan.
Set goals you know you can meet
There’s nothing wrong with being ambitious when it comes to beefing up your finances, but making huge goals only to give up on them will do nothing to help you. Setting smaller, more attainable goals will not only show progress, but it will motivate you to stay committed.
For example, say you want to add $1,500 to your savings over the next 2 months. Instead of focusing on adding $1,500, break it down into 8 week increments. That equals $187.50 each week. Now doesn’t that sound easier to manage?
The awesome thing about goal setting is that the concept can fit into any scenario you want. From paying off debt quicker to not eating out as often, setting smaller goals is a great way to help you achieve your big goals. To make things even easier, you can set up an automatic saving plan that will help keep you on track each month.
Fun Fact: According to a study done by a psychology professor at Dominican University in California, you are 42 percent more likely to achieve your goals just by writing them down.
Make a budget (Seriously…do it)
Once you know where you stand and what your goals are, next comes the most important step: the budget. It can’t be stressed enough how critical a budget is because you will never have any doubt about where your money is going. Not to mention it helps keep you in check when faced with the urge to make an unplanned purchase.
Here’s the quick rundown on how you can make a budget. First, you need to add your monthly income, subtract necessary expenses you know you will have to make. Next you will work up a plan for other optional expenses that will help you save and still have some spending money.
Just so you’re aware, rates are projected to rise in 2017, so it might be a good idea to compare savings account rates so you can be confident you’re earning the most possible on your savings.
Warren Buffet once said: “Do not save what is left after spending, but spend what is left after saving.” Great advice to keep in mind when delegating your money.
This might be the hardest step, but just know that big changes can’t happen overnight. Easier said than done, right? If you stay true to your plan and keep setting small, obtainable goals, you’ll start to see your finances grow and flourish. Don’t give up because you have an unexpected car repair or medical bill.
Keep coming back, adjust as needed, and you’ll see how much having a financial plan helps your stress and your money. This is your year!
But wait there’s more! We’re also going to throw in some bonus tips from some of our awesome branch managers.
Here’s to a financially healthy 2017!