Right now is the perfect time to reset your life. Take a minute to consider your personal trouble spots. What do you think you can improve on? If you answered the question with your finances, you are not alone, and this article is here to help. Learn how to achieve financial control this year with these easy steps.
1. Asses the state of your finances. The first step to get your finances in order is to get a clear understanding of where they stand from a big picture. What is your debt, what are your investments, and where are you with savings?
Don’t forget to check your credit. Use a free service, like Credit Sesame, that offers free scores and monitoring. The higher your credit score, the better off you are since you need good credit for everything from renting an apartment to securing a loan.
2. Set Goals. Once you have a good understanding of where your finances stand, set goals to take control of them. There is a lot to consider, but think about where you want to be financially in both the short term and long term. You can get a financial adviser or another expert to help.
What are your goals for retirement, savings and investing? Consider any big purchases you want to make like saving for a new home, car or college.
Set goals to pay down your debt, as well, and assess where you want to be with your school loans or credit card debt in a few years. Keep in mind that school loan debt is considered “good debt” and that credit cards with higher interest rates make it increasingly difficult to pay down the principle. It’s important to try to pay your credit card balance in full each month so that you don’t experience the consequences of ballooning interest.
Whether you are just starting out in the workforce, or are close to retirement age, you should be setting goals for your retirement to ensure that you will be in good financial shape when you stop working.
3. Make a plan. Now that you have new goals to achieve, you need to make plans to accomplish them. Start by setting a monthly budget and set your cash flow by considering what amount you will spend, earn, save or pay down debt with. Make investments that are more or less conservative based on your savings goals and ensure that you are well diversified.
There are a few other things that are often overlooked that you should do. Make sure you revisit your insurance to get the best premiums. Check that you are maximizing your job’s financial opportunities like taking advantage of a 401k or pension plan. Also, make sure you work with a lawyer on estate planning to ensure that you leave your loved ones financially secure.