The start of a new year is a time when many of us reflect on our finances. Many people start to gather documents to prepare their income taxes and make a resolution to better organize their financial papers.
This is also a good time to review your spending habits, develop a plan to reduce debt and think about saving for the future. Here are some suggestions to get you started on the road to financial fitness.
- Set some goals. If you don’t know where you want to go, it’s hard to figure out how to get there. Make a list of things you want to accomplish this year. It can be anything from saving an extra $20 a month to paying off your credit cards. Then list steps that you can take to achieve your goals. Post your list of goals where you can see it every day.
- Get organized. Can you quickly locate important papers without having to search every room in the house? In establishing a record-keeping system, you need to consider what records should be kept, where they should be kept and how long they should be kept. Create a filing system that works for you.
- Track your spending. Download an app for your phone that you can use to track spending or keep a piece of paper in your wallet and record how you spend cash for a few weeks. The act of writing it down makes you more aware of what you are spending. It is sometimes surprising to find out where your money goes.
- Develop a budget. After tracking your spending, you can create a spending plan that will work for you and your family. Don’t forget to allocate money for savings and emergencies.
- Add up your debt. It’s time to find out how much you owe. Make a list of everything you owe including credit cards, car loans and student loans.
- Set up a savings plan. Sign up for payroll deduction from your employer and have the money automatically deposited into a credit union or bank.
- Write or update legal documents. Do you have a living will, power of attorney and durable health care power of attorney? If you do, now is a good time to review or update them. If you don’t have these documents, this can be one of your goals for the New Year.
- Review your insurance. Review your auto, homeowner's, life and disability insurance to determine if you are adequately covered. Comparison shop for prices and service, and find out if you qualify for any discounts for multiple policies, safe driving or safety equipment.
Sharon Treen is director of the Flagler County Cooperative Extension Service, University of Florida. For information, contact the office, 386-437-7464. The extension service is at 150 Sawgrass Road, off County Road 13.