Now that you’re in the midst of recovering from activities that involve the holidays, it’s time for us to get back on track from fitness, work mode and our finances! We know that when it comes to the past few weeks, we have probably splurged quite a bit on creating functions at our home to spend time with our friends, family and co-workers, purchasing gifts for a number of people in our lives, as well as buying things for ourselves to wear to a number of functions. Simply put, although these expenses are definitely work the experience, we have a fresh year ahead to make sure that we are making the plans that we need to in order to take care of our expenditures, plan for the future as well as the unexpected. We have 5 tips that we suggest to make sure that you are mindful of this and can do so in a comfortable way!
TIP 1: Get the Facts and Make a Plan Of Your Personal Expenses
In order to understand your finances, you need to be able to know what you make each month (depending on your job whether you freelance etc you may have multiple sources of income that flow through at various intervals), your monthly expenses, what you’re putting into long term savings (think retirement) and short term savings (think planning for a trip, wedding etc) and more. The best way to put all of this down is to download a monthly budget template to keep track of everything and to understand how you spend and save each month. This will ensure that you’re aware of your progress and what you need to do. It also allows you to adjust as needed!
TIP 2: If You’re Living with a Spouse of Significant Other Have a Financial Conversation
When it comes to taking care of your bills, you need to understand expenses that are solely your responsibility, your spouse/significant other or roommate and those that are shared. Conversations of this nature allows everyone to be on the same page of the financial plan and ensures that there are no surprises. This is a great time to talk about expenses for the household, insurance, car related expenditures, travel and more. These conversations will make talking about money easier to have and assist in making decisions that may include moving, changing jobs and more.
TIP 3: Create a Series of Goals That You Are Looking to Tackle
We all have goals within our life plan. Whether it’s getting a raise at a job, begin working on a side hustle that could eventually become a full-time job or purchasing a large expenditure. Listing these items will allow you to see what adjustments you may need to make in order to maintain those expenses that are ongoing versus these additional items. Once again, sharing these interests with those in your household are an essential for everyone to participate in making these goals happen or being aware of why money you’re earmarking for these areas are not available to the household at large.
TIP 4: Additional Funds
There are times throughout the year that you may receive a raise, a commission, a tax refund or others funds that are not regular. It’s easy to think about placing them on a splurge worthy gift; however, take a moment to think about whether this can be placed on a larger bill like a credit card or student loans which could make monthly payments smaller. Perhaps you can spend half on something that you want that’s not a necessity and leave the other portion to go towards expenses. Having an open conversation will allow you to make a decision that works for you and/or your household.
TIP 5: Evaluate Your Plan
We’re a huge believer that when you make a plan, you need to assess it every 3 months. Maybe you have had a shift in your salary or you have had a change in terms of additional/less obligations. A budget is meant to allow you to live comfortably and to take care of what you need to do each month. It is flexible in the sense that it changes based on your lifestyle. Imagine having the same monthly budget for the last 5 years, but not making allowances for factors that have changed. Every 3 months, check in with what your monthly budget is and what your goals are, if there is a change in the funds you have access to whether increased/decreased and what this means by all those that contribute to your household. This evaluation is easier to assess by using your monthly budget template as a way to track, adjust and to implement your strategy.
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