According to a Fidelity Investments survey, about one-third of Americans plan to make a money resolution for 2017. Planning to save money or paying down debt is always a great idea, but sometimes you don’t know where to start, which is half the battle to attaining your goals. Here are a few suggestions to help you better prepare and determine your objectives for the year:
Track Your Money – Start tracking your expenses! This is the best way to get control of your money, and will give you a better idea of where your money is coming from and where it is going. To get started, use a notebook or spending tracker to monitor your expenses for one month. Take time to understand the numbers by dividing your fixed expenses (e.g., student loans, mortgages, rent) from your unnecessary expenses (e.g., entertainment, restaurants, clothing). From there you can formulate ideas and decide what changes you can make in the new year.
Check Your Credit Report – By law, you’re entitled to see your credit reports once per year for free. In order to better manage your finances, it is important you know what is on your report, especially because you’re responsible for the accuracy of your credit file. Visit the Federal Trade Commission’s website for details about your rights.
Determine Your Goals – Once you have an idea of your money spending and saving habits, you can determine your goals for the year. Create short-term, mid-term, and long-term goals that are clear, concise, realistic, and attainable. Do you want to pay down debt by $5,000? Are you focused on putting away $100 of your paycheck into a savings account? Maybe you would like to open and contribute to an individual retirement account (IRA)? Now that you have determined your goals, prioritize each of them in order of importance and create a timeline of how long it will take to accomplish each.
At the end of the day, be sure to develop a financial plan that works for you. “The secret of getting ahead is getting started. The secret of getting started is breaking your complex overwhelming tasks into small manageable tasks, and starting on the first one.” ― Mark Twain
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