I am so excited to welcome you to my new webpage and get started on a money saving journey with my readers. This blog will be chock full of tips and strategies each month that you can use to set and achieve any and all of your financial goals from the short term to long term to the ultimate of a secure, happy, well-funded retirement and even a legacy to leave to your heirs.
The new year is traditionally a time of getting started so this is the perfect time to take a look at where you stand right now with your finances and what goals you would like to achieve this year and beyond. No matter where you are at present the best time to get started on improving your financial status is right now!
Before you can begin to set goals it is important to know where you are right now. Set aside some time to take a look at where your money is going. Write out an expense sheet. Include all your expenses big and small, from your fixed expenses (rent/mortgage, insurance, cable, phone, etc.) to your more variable expenses (food, heat, gas, clothing, entertainment, etc.). And don’t forget the occasional expenses (school supplies, Christmas, vacations, car repairs, etc.), as well as all those little expenses that you hardly think about (your morning coffee to-go, vending machine treats, lunches out, beauty products, etc.). If you are not in the habit of noting all your expenses, it may take some time to remember them all. I suggest getting a little notebook to record what you spend money on each day at least for a month. (Even I still do this on a daily basis.) You can use this worksheet I've made to complete this step.
In the meantime, take stock of any debt you have. Write down all of your debts including the full amount owed and the interest rates. Add them up to get your total owed.
If you have assets, good for you! Take note of them too. Money in the bank? 401k (403b)?, Any investments? And write down what your income is, including all sources; Your (and your spouse’s) salary, child support, SS payments, rental income, extra side jobs, etc.
Now that you have a clear picture of where you stand, you can plan your goals.
Let me give you a little hint here. Your first goal should be to pay those debts down!
No debts? Great! Is there something you want to save up for to buy this year? Do you have a bigger purchase in mind that might take a few years to save up for? (a new car or down payment on a house?) Do you want to save up for education? (yours or your kids). And then of course there is the ultimate goal, that nice comfortable retirement nest-egg!
For the smaller goals it is simply a matter of dividing the total needed by the months you have until you need the money. Then you know the exact amount you need to put away each month to achieve it. For that ultimate big retirement reward, slow and steady wins the race. The earlier you start the better off you will be. This should be an automatic amount taken right off the top, before you even see it. Of course a job 401k will do this for you, but if you don’t have access to one you can set up your own retirement account and have automatic deductions going straight into it from your checking or savings account each month.
I know this is a lot to contemplate all at once, but for now just take this month to take stock of your expenses and debts, and think about what goals you might have for your money and I will lead you through the rest of it step by step as the year progresses.
When you do it step by step you will see how easy it can actually be to turn your finances around. We will start to talk next month about just how to budget your expenses and find the money to put aside for all those goals.
Stick with me and you too can have a bright future!