We know we are supposed to visit the doctor once a year and the dentist twice, just to make sure our physical health is on track. But how often do we stop to reflect on our financial health?
“Do not save what is left after spending, but spend what is left after saving.” — Warren Buffett
The New Year is a great opportunity for a financial checkup. It’s a natural time to pause, reflect and set goals. Here are a few considerations when you do your self-check:
- What are your financial goals for the year? Maybe you need to focus on reducing debt, buying a car, or saving for a down payment on a home. Identify your goals and write them down — just writing them increases the likelihood of making progress.
- Evaluate how any recent or upcoming personal changes are impacting your financial future. A job change, birth, divorce or moving will all have a financial impact. Plan accordingly.
- Start budgeting. If you don’t already create a monthly budget, this is a powerful tool to move your financial bottom line. By understanding where you are spending (and overspending), you can set intentions for your money and make real progress. A budgeting app will make this task easier.
- Put safety rails in place. Begin or grow your emergency fund. Work to pay off debts, including credit cards, medical bills and student loans. Save for retirement. In addition, be sure you have a current will and adequate insurance coverage (health, life, property, etc.).
- Automate when you can. Set up automatic withdrawals to save more, especially for retirement and college. The beauty of automated savings is inevitably one day you turn around and say, “Wow! That really grew.”
Happy New Year!