Like many other end-of-year reviews, reflecting on finances is always a good idea. Forming a budget, controlling expenses, and setting savings goals should be at the top of the list. It is especially important because financial stress can even have health implications.
Here are ways to maximize your financial goals:
1. Analyze your cash flow
Before you can budget or set goals, you need to understand where your income is coming from and where your money is going. Categorizing each expense from you bank accounts and your credit cards. Sound daunting? Here are some great financial tools available online. Mint and PocketGuard are some really good apps for doing just that. Link your accounts and get graphs of your spending by category, keep track of upcoming bills, and get some great tips for saving!
2. Set savings goals
A common wish is to have a saving a account that has enough for emergency expenses or even a holiday savings to make purchasing gifts joyful and not stressful. There are as many strategies as days in a year. However, the common theme is to do it automatically. You can use a program like Acorn to set up automatic withdrawals and round-ups on transactions or even more simple. Determine how much you want to save, divide that amount by a monthly, weekly, or daily amount. Finally, set up automatic transfers between your checking and savings account. You’ll accumulate a great base in no time without feeling stressed.
3. Review and revise monthly
Once you have a strategy, don’t forget to keep yourself accountable. Set a time to sit down each month and do a review. Where have you spent more and where have spent less. What can you cut out to save even more? What expenses or activities like birthdays, anniversaries, or taxes do you have coming up the next month. By reviewing and planning , you’ll be more prepared for the unexpected.
Financial stability is one of the most common goals. Be sure to celebrate your successes as well. Just set some aside for treating yourself as well!