The beginning of the year offers an excellent chance to assess your life–including your financial well-being. Many people make resolutions or set intentions while others clean out the clutter or define a personal plan to reach a goal.
No matter how you use the first month of the year, one task that should be on every January checklist is a financial check in. With a year behind you and a new one just waiting, you can figure out what worked for you and how you can do better this year.
A financial check in shouldn’t be overwhelming. Tackle one or two tasks per week and soon you’ll have an organized foundation for the coming months.
Set Your Goals
What kinds of life goals or needs do you have this year and how can your finances help you accomplish that? Your goals don’t have to be extravagant, but by listing what you want, you’re able to get a clear picture of what you need to do.
Think of these as potential investments:
- savings for emergency or retirement
- different place to live
- family events like a wedding or reunion
- home improvements
- new hobby
- technology upgrades
Estimate Your Costs
An estimate isn’t a guess. Do your research to find out how much that MSN program will cost or how much those bathroom updates will set you back. Map out a vacation to include everything–transportation, passports, food, trip insurance, and even tips. If you want to follow your passion into rock climbing, stock trading, or needlepoint, ask people how much they typically spend on equipment, supplies, fees, and memberships. Knowing what to expect in costs ensures you’re really prepared and will be able to follow through on your financial goals.
Find Your Money Leaks
Now that you know what financial goals you want and how much it will take to get there, start looking for ways to save money or make additional money to meet those goals. Sure you can look for a side gig or additional shifts, but a painless way to bulk up your available cash is to find the careless spends in your budget.
Here are a few silent money drains to tame:
- eating out because you were rushed
- daily coffee or sodas on the run
- not returning items you should (the sweater that looked too big when you got home; a gift you never gave; the duplicate dog bed your partner bought)
- subscriptions you don’t use (streaming channels you never watch; magazines you don’t read; music you don’t tune into; gyms you haven’t been to)
- purchases or sale merchandise that you don’t absolutely love
- fees you could get reduced or find a less costly provider (mortgage, credit cards, bank fees, phone plans, electricity, home maintenance plans)
Set Your Priorities
Now that you have goals, know how much it will take to reach them, and have found extra cash to help you get there it’s time to plan. Some of your goals are going to be an “immediate need” while others will be a “nice to have.” Order your goals and set a timeline for when you would like to reach a specific milestone and write it all down.
Post your financial goals and reminders in a place where you’ll see them frequently–you’ll be inspired to follow the steps you set and stay on track.
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