What are your goals for the new year? Do you have a financial savings or investment plan? New year resolutions are essential in shaping the year and putting plans in motion to achieve your goals and objectives.
When it comes to finances, there are specific steps you should take as the new year begins for better finances throughout the year. Here are some financial resolutions you can make for the new year. It begins with adequately planning your budget.
Tips for Creating a Financial Budget
A budget can be defined as a well-detailed estimate of your income and intended expenditure for a specific time frame. You can create a monthly or yearly budget to help you manage your finances better. You can improve your finances with a budget by:
Calculate your annual net worth
Your budget can only be centered around your income, and it is necessary to know how much your income is before making a budget. The best way to do this is to calculate your annual net worth to get an estimated income value for the entire year. This would help you plan your finances around what's available to you.
Savings
You can’t grow your finances if you spend it all and keep nothing for the rainy day. Much as there are several financial responsibilities, such as bills, rent, food, and even transportation, it is best to budget a percentage of your income for savings. You can budget about 10-15% of your income for your savings. However, consistency and commitment to your savings are paramount to helping you improve your finances this year.
Plan toward big projects
There is always something to spend money on; therefore, if intentional steps are not taken to make financial plans for big projects, you may never get them done. Projects like getting a car, property, or paying college tuition usually cost a lot and would require adequate planning to ensure the funds are available when needed. You can achieve this by increasing the amount of your regular savings and making some budget cuts to your lifestyle, or you could create special savings for the project.
Make plans for financial emergencies
We can’t predict the future, and as much as we always hope for the best, we can’t rule out the possibility of trouble or crisis. It is important to keep some money aside to cater to emergencies, and unforeseen occurrences like motor accidents, fire outbreaks, theft, sickness, and the death of a loved one, among others. Financial emergency plans act as a safety net for your finances so that you’re not entirely dried out should any emergency occur. It also guarantees your peace of mind and makes handling the situation easier.
Make smart investments
Saving is great but investing your money is even better because it is a great way to grow your finances. Explore various investment options and choose those most suitable for you and your financial goals.
Of course, there’s no one better placed to help you strategize than a certified public accountant and financial planner. You can get professional help to create a budget and make better financial decisions for the new year. Reach out today to get started.