Make Your Personal Finance Plan For 2017
As the new year begins, many people decide that it’s time to create a personal finance plan. It’s important to remember that when you’re preparing this plan it should cover the short-term and long-term equally. One reason so many people fail to maintain a plan they establish is they can’t see the value of planning over the long term; having a plan addressing both long and short-term goals can help you stay on track.
Creating A Basic Plan
Most of us know we need to have a budget in place to succeed financially. While this is a good starting point, there is much more to having a solid finance plan in place than simply budgeting. Here’s what you should consider doing for 2017:
- Pull your credit report – your credit report can have negative information that can prevent you from achieving your long-term financial goals. Every consumer is entitled to a free copy of their report annually. Get a copy, verify there are no errors and if there are take immediate steps to resolve those errors. Annualcreditreport.com provides all the information you need to obtain your reports and correct errors.
- Decide on your goals – whether it’s reducing your current debt, better funding of retirement or saving money for vacation, education or a new home, put your goals in writing so you have a reason to stick with your budget in the new year. Make sure your goals are attainable or your chances of success may be diminished. The more realistic the goals, the more likely you are to be able to achieve those goals. This is something to keep in mind as you create your budget as well.
- Plan for retirement – while you may think that if you’re in your 20s or 30s that you need not worry about retirement, the beginning of the year is an excellent time to get started funding a retirement plan. Check your employer’s plan, in many cases, employers will match funds and you could be leaving money on the table if you’re not participating. Don’t treat retirement savings as an afterthought; budget a fixed amount each month and have the funds transferred directly from your paycheck or bank account.
- Develop a spending plan – take a hard look at your current expenses from the coffee you purchase on the way to work to your monthly cable and cell phone expenses. See what areas you might be able to curb your expenses. You may need to consider downsizing your apartment, taking public transportation instead of paying for fuel and parking or you may need a more cost-effective cell phone plan. Take steps to minimize or eliminate credit card debt; particularly those with higher interest rates. Consider using the savings to pay down your credit cards and then fund your savings account after the credit cards are paid off; this is a great way to accomplish two things: minimizing your spending and maximizing your savings.
- Develop a savings plan – savings should be a part of every financial plan. Take small steps; for example, if you pay off a credit card, move the money you would have used to pay the card monthly into your savings account. You might be surprised to find out how much you can save in a year when you do this. Any way you can save money including taking advantage of rebates and coupons should be considered as a way to increase the amount of money you save. Many people start the new year resolving to get out of debt and save more money. If you have a plan in place that is designed to succeed, you can make 2017 the year you reduce your debt, increase your savings and fund your retirement account.
Let this be the year to find, and stick to, a successful financial plan which can lead you into a more secure financial future. If you are a resident in Central Virginia including Mechanicsville, Richmond, Hanover, Henrico and surrounding areas and you’re interested in developing a personal or business financial plan, contact a tax professional at Rue & Associates today!