It never hurts to start thinking about your financial comfort. The beginning of the year is a great time to do it, even though any time you decide to do it is also a great time.
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It’s in that vein that we give some general tips on financial planning, spending, budgeting, taxes, or other things that, because 2014 is right around the corner, is a good way to start planning for your financial future, or addressing some things in your past. We don’t call these resolutions because we’re not trying to change you just to change you. We hope to make you think about some financial aspects of your life and how you can feel more comfortable with just a few changes; okay, 7 changes. Here they are:
1. Plan on saving some money this year.
You may have said this to yourself in the past but now is as good a time as any to start. If you could find a way to put $10 away somewhere in your house each week and not touch it that’s $520 in a year. It may not sound like a lot but it’s a start. If you can put away more, good for you.
The idea is that once you start you’ll find ways of keeping it going. You might increase the amount at some point and you might even think about investing down the road. Putting money away isn’t only for luxuries, as we’ll be mentioning a few more things down below.
2. Plan on paying off at least one credit card this year.
If you only have one credit card that’s a good thing, but if you have more than one, work on a plan to pay one of them off. Every credit card bill you receive tells you how much you need to pay to get your entire balance clear in 3 years. If you can afford to add a bit more to that you’ll pay it off sooner, and if your balances are relatively low, get it paid off even quicker. Even if you can’t pay off the entire thing, lowering your outstanding debt will make you feel better and improve your credit score.
3. Plan your necessary spending on a monthly basis.
We didn’t want to use the word “budgeting” but that’s what it is in a sense. If you know what you normally spend each month, you’ll know how much you have available for other things. Since your monthly bills don’t normally change all that much you only need to do it once, and January is a good time to do it. It makes planning for things you want or need down the road much easier to do.
4. Plan at least one pleasurable event a month.
Having to go austere all the time, even when you don’t have much extraneous cash to spend, will drive you nuts. Having something to look forward to, no matter how small, can make things more bearable.
Though the cost of movies are going up, not including snacks you can still see a movie for less than $15, in some places less than $10 (for instance, in the Syracuse area there’s a theater that plays recently new movies for under $2 during the week), as long as you avoid 3D. Going out to dinner might be nice, but you might not want to go to a very expensive place unless you can easily afford it. The basic idea is to be fiscally responsible but not shut yourself totally off from a fun day here and there.
5. Research things you want online for price comparison.
Even if you don’t want to buy an item online, it’s smart to see what multiple stores are offering on items so that you know if you’re getting a good deal or being cheated if you want into a store. It’s easy to research everything online these days that there’s no excuse for not doing so.
In this period of trying to protect yourself during the pandemic, it might be easier to buy things online. However, please don’t forget to frequent local stores because you’ll still want them around when we’ve gotten beyond this monster.
6. Plan your tax contributions better.
If you’re someone who’s good at managing your money or investing, claim a dependent more on your taxes than you actually have and do something positive with the extra money. You might not get a refund on the year, but if you invest the extra money you get in your paycheck, you’ll earn more than you might end up having to pay that way. Not only that, but you’ll get a tax break from investing in certain types of options that won’t come back on you until you claim that money later on.
If you’re someone who looks forward to your yearly refund, then think about going the other way, claiming one less dependent than you have. It allows the government to take a little bit extra from you, but it allows you more options in determining how you want to use the refund money you have coming.
7. Put a little money away for “extra things”.
Many people think about stashing money in the house as a “rainy day” fund. This is something you should have been doing anyway because who plans for appliances to up and die or something to suddenly go wrong with your car?
Some of our clients have interesting ways to save extra money. You can put all your change in one place, then once a month roll them up if you have enough and put them away to take to a bank one day. If you find yourself having multiple one dollar bills, every once in a while take a couple of them out and put them in some kind of cannister. It all helps in the long run and it can feel empowering when you’re adding more money to a growing pile. 🙂
That’s it for now. Enjoy the new year, be safe, and let’s look towards a monetarily comfortable 2021.