It is easy to get caught up in the holiday spirit and let your spending habits get a little crazy towards the end of the year. Heading into a new year is the perfect time to set goals. But New Year’s resolutions do not have to be focused on only health and fitness. This is the perfect time of year to set your financial goals for 2023.
- Know your financial condition. Before you can set any goals, you need to take a look at your finances from a “big picture” perspective. What is your monthly income? What is the total of your monthly bills? Are your expenses exceeding your income? How much debt do you have? These questions need to be addressed before goals can be set. Make sure you are accounting for all money going in and out even if you consider it a small purchase. Those little purchases such as subscriptions and your daily coffee can add up quickly.
- Start tracking. Each month your finances will fluctuate. Some months you might have more money left over after paying expenses. Other months you may not have any extra at all. If you know there is a month coming up that you need extra cash, tracking your spending will help you save extra when needed. If you are tracking your finances and have a plan in place, expenses will not be as much of a burden. It is also important to put any extra savings into an emergency fund. That way, when an unforeseen circumstance happens, you will be prepared.
- Be practical. It will be discouraging if you set unrealistic financial goals that are not achievable. Once you do a financial overview, you can set goals that are obtainable for your specific situation. An example of a financial goal could be automatically transfer a certain amount of money into savings each month. Another goal could be to pick one of your debts and pay it off as fast as possible, or set aside enough money each month to go on a trip later in the year. Any financial goals, big or small, is a great way to start off the new year in a positive direction.
Need help brainstorming your financial goals? Contact your personal banker today!
