facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
5 Finance Basics for the New Year Thumbnail

5 Finance Basics for the New Year

The new year is here and now is the time to set yourself up for a financially secure future. While organizing your finances might appear daunting, setting 1-2 achievable yearly goals can be more straightforward than you imagine. Kickstart your year on a positive note by considering these five financial basics when outlining your plans for the upcoming year.

1. Draft a Monthly Spending Plan

Setting a monthly spending plan might sound obvious, but many struggle. Understanding your expenses is the first step to better financial control. It reveals your monthly costs and helps pinpoint areas for focus and improvement.

2. Get Control Of Your Debt

Create a sensible plan to cut down on variable interest rate debt and stick to it consistently. Calculate the monthly payment required, assessing your spending to integrate this plan, even if it means cutting back on other areas. It is also important to ensure you do not add more debt throughout the year.

3. Make an Emergency Fund a Priority

Medical costs, major vehicle repairs, job layoffs, and house maintenance can quickly derail your entire financial plan. A good rule of thumb for an emergency fund is to start with a month’s income plus $1,000. Once this goal is achieved, you should keep saving until you have about six months of expenses, if you're still working. If you're retired and living on a fixed income, you may need to plan for a longer period. If an emergency were to require the funds sometime during the year, you will need to regrow it. 

4. Prioritize Retirement Savings

Saving for retirement is something often put on the back burner until it is too late. The sooner you begin saving for retirement, the more time your investments have to grow. Only saving what is left over at the end of each month after spending may not be enough to meet your income needs down the road. Don't let your long-term investments be an afterthought. 

5. Create a Long-Term Financial Plan

Many people have difficulty envisioning the delayed gratification of  financial security, especially if they feel they have more immediate financial concerns to deal with right now. Consider any long-term financial goals, such as buying a house, starting a business, or early retirement. Draft a plan that includes saving, investing, and other ideas about ways to build wealth. SET A TIME TO MEET to discuss what steps or tradeoffs may be necessary to make your financial aspirations a reality.

This content is developed from sources believed to be providing accurate information. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.