Posted On: December 29, 2023 by Farmers Trust & Savings Bank in: Budgeting
Usher in the new year with plans for financial improvement and resolutions to do more. Here are some tips to get you started:
Tune your budget
A budget is just that – a plan that starts with your income and your fixed expenses, such as your mortgage, insurance and utilities. The plan incorporates your savings goals, and the remaining money is designated for your other expenses. Now is the perfect time to assess last year’s budget or create a new one. Reviewing how you spent last year’s money will help you make better financial decisions for the year ahead. Include a method for tracking your spending. Even with a solid plan, there can be surprises along the way, so be sure to build an emergency fund into your budget.
Plan to meet your goals
Consider how you will accomplish your goals. You might have shorter-term goals, such as purchasing a new home, as well as longer-term goals, like retirement. Each set of goals requires different kinds of planning and saving. Financial planners recommend setting up a separate savings account for each goal. This way, your progress toward that goal is clear. It’s best to work backward for determining how much you need to save for each goal. Determine the cost of your goal, and then establish a reasonable time frame as well as how much you’ll need to save each month to reach it.
Spend mindfully
Make your financial future more secure this year by identifying your wants and needs. Your needs are necessary for survival, like food and shelter. Your wants are simply things you desire, like a luxury car. Tend to your needs first. Then, if there is money remaining, consider your wants.
Maximize tax contributions
Tax deductions can be a valuable source of savings. If you have employer-matching funds available, take advantage of them. Also, verify with your Human Resources contact and your accountant that you are contributing the optimal amount to your 401(k) and IRA.
These are just a few of the many ways you can prepare financially for the coming year. With a little attention to some often-overlooked details, a little perseverance and mindfulness throughout, you’ll be moving forward with a strong foundation and positive outlook.
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