Checking In On Your Financial Health
It’s the beginning of the new year here in Gilbert, AZ and for many, that means taking the time to review the past year and set some goals for the new year. One topic that is often overlooked in all of the reviewing is a financial review. Yet our finances play a huge part in the kind of lifestyle we enjoy, from the apartment we live in to the vacations we take to the food we eat. Today, the Liv Northgate Blog has some ideas for taking a look at finances and planning for the upcoming year.
If you don’t already know where you stand, financially speaking, find out. Before you can move forward, you have to know where you are currently. Start by reviewing last year’s bills, expenses insurance, investments, retirement funds, and then build a budget based on that information.
If you have tried budgeting in the past and it never seems to work, try tracking your spending for several months to see where you are actually spending. This takes dedication. Track everything, down to the soda you stop for on your way home. Once you have the data on what you are actually spending your money on, build your budget. If you need to make changes, you will be able to more accurately see what can be adjusted. Having a way to track and build a budget is important. We like this article which takes a look at five budgeting apps that are designed for that purpose.
Make it a point to get out of debt and to save every month. A good rule of thumb is to have an emergency fund that will cover at least three month’s expenses (six months is even better!). Having an emergency fund also relieves stress related to unexpected financial needs cropping up, and saves money that may have otherwise gone to interest payments on a loan. First build up an emergency fund to cover one month’s expenses, then turn your focus on getting out of debt. Once you are out of debt, continue to build your emergency funds until you have money for at least six months’ worth of expenses.
Learn how to live on less than you earn. If you follow this advice, no matter what your income is, it will be enough. It takes discipline, planning, and hard work, but the resulting peace of mind is worth the effort. What are your tips for staying in good financial health? Please share in the comments so we can all be enlightened.