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New Year Money Goals

Along with the “New Year. New You.” resolutions, many people WANT to improve their finances every year. It is an excellent goal, but “wanting” and “doing” are different sides of the coin.

Taking ownership of your finances is a holistic process and best done step-by-step. Because just like any physical diet, a financial diet that is too extreme can quickly lead to failure. As they say, “the only way to eat an elephant is one bite at a time.” Here are a few ways to start improving your finances.

First, Take Full Assessment of Your Finances

Understand your net worth (aka assets and liabilities):

☛  List out all of your assets by category (cash, investments, real estate, etc.)  

☛  List of out your liabilities (credit cards, student loans, car loans, mortgages, etc).  Make sure to list out the interest rate, payment and balance for all loans

* This form can help you capture all your assets and liabilities.

Understand your cash flow: 

☛  List all gross and net (take home) income.

☛  List out your expenses. 

This is often the hardest part of the exercise. It is usually very easy for people to list out recurring monthly expenses, like the rent, mortgage payment, cell phone bill, etc., but most people underestimate their miscellaneous daily expenses: lunch, coffee, entertainment, Amazon, and the random < $20 purchases. 

* Use excel or a budgeting tool to stay organized

Next, Find Areas of Improvement

  1. Consolidate accounts and/or debts for simplicity and to possibly reduce fees
  2. Increase income if possible
  3. Reduce expenses!

Liabilities: Pay off your credit cards as fast as possible. This one of the biggest expenses that hold people back from being financially healthy.

Subscription Services: Are you still using them? Are you budgeting for them?

Electricity: Review your bill and research options to switch to a lower provider. Make sure to read the fine print and understand when the contract ends.

✃What things you can go without? 

 ☛ Skip the Starbucks and make your own coffee in the morning

☛ Pass on eating out and cook at home instead

☛ Go an extra week or two between hair appointments 

☛ Pause a day or two before pulling the trigger on a big purchase

☛ What you can you repurpose or renovate yourself?

TIP: Every penny saved by reducing liabilities or expenses is an automatic savings program. 

  1. Build an emergency fund of 3 to 6 months of living expenses. And if you are self-employed, aim for 6-9 months. Then consider investing beyond the basic emergency fund.
  1. Take advantage of your employer’s retirement plans. If your employer offers a 3% match, contribute at least 3% to your 401(k) and increase it by 1% per year.

See that wasn’t so bad – right? Financial health is achievable, just by adding one good habit after another over time. And don’t forget to celebrate your successes and REWARD yourself for a job well done. In place of a pricey $$$ splurge, find joy in catching up with a friend, a free concert or indulging on an inexpensive treat. Or maybe that automatic savings account you have been growing helps pay for a trip you have always wanted to take. 

Like any lifestyle change, it is a continuous, holistic process that should be reviewed every quarter. Paying attention to money in and money out will let you see what other areas you can improve. 


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