If you’re like many consumers, you’re using the first part of the year to think through and settle on your goals, hopes and aspirations for the coming year.
It’s a time for fresh starts and looking toward a better future, not dwelling on mistakes of the past. And that’s especially true when it comes to your financial future. The new year may be just the impetus you need to evaluate what you might be doing better to get your affairs in order and start building wealth. After all, as Henry Ford once said, “Failure is the opportunity to begin again more intelligently.”
Consider how the following steps may help you launch your new financial year in a brilliant way.
- Create or review your annual budget. Author Alan Lakein once reminded us, “Failing to plan is planning to fail.” And that’s doubly true when it comes to controlling your money and understanding exactly where it’s going. Keeping a close eye on your income and expenditures and sticking to your guidelines could well mean the difference between a calm, happy life and one filled with stress and upheaval. Another good idea is discussing your budget with your spouse or partner so you’re both on the same page in terms of spending and saving.
- Work toward eliminating debt. For most people, some debt is a fact of life. But having a solid plan for cutting it down to size can feel empowering, and having minimal debt allows you much more freedom when it comes to your job and your overall lifestyle. Be sure to pay it down in regular installments; you may also wish to reduce spending, take on a secondary job and/or sell off belongings to reduce your balance sooner. Another option is to consolidate all your various debts into one loan that offers lower fixed interest and works to keep you better organized.
- Sock money away. Saving money can be challenging in our materialistic society, but it’s also crucial to financial success. A good goal is to set aside 10 percent of your annual income apart from any investments you have. Let this be the year you get in the habit of reducing grocery bills, eating out less, brainstorming ways to save on your utilities and cutting other corners in exchange for financial health. The day will come when you’ll be very thankful you did.
- Review your investments. Learning as much as you can about different savings and investment vehicles and the comparative returns they generate could be well worth your time. Think beyond the 401(k) or retirement fund offered by your employer and consider the benefits of CDs, savings accounts and/or money market accounts. If you’re just getting started, you may wish to consult with a financial planner who can map out a plan with you. For many people, savvy investments are the only way to beat inflation, build wealth and ensure a comfortable standard of living in the future. “There is no guarantee the market will go up the first day, month or even year that you invest in it,” states a recent article on MotleyFool.com. “But there is one guarantee: Doing nothing at all will not provide for a comfortable retirement.”
- Plan to learn more about finances. Copious books, online articles, newsletters and classes are available about the ins and outs of investing and otherwise managing your finances. The more you know and understand, the better you can weigh risks and take advantage of optimal opportunities.
Call an Amplify Credit Union personal banker at 512-874-7171 for help with your financial strategy or to learn more about savings options we offer, click below.