For many the New Year ushers in chances to get things better. You can get the edge by spending quality time budgeting your personal finances.
Another day, another dollar. Another year, another chance to reach and exceed your financial goals and objectives. Of course, you’ll find it easier to surpass your financial expectations if you’ve taken the time to map out what is happening with the money that comes into and passes out of your life.
When we fail to plan for the necessities in our lives, emergencies and other unforeseen circumstances tend to sneak up and rob us of any reserves we might have accumulated. The only thing worse than seeing your savings depleted is to see your high interest rate debt increase because that’s the only way you have to pay for the unexpected.
Asses Where You’re At
Once you have determined that it makes sense planning this year’s financial future, you’ll want to be sure to set aside time for current assessment. It has been said that if you don’t know where you are, you won’t know where you’re going.
From a financial planning perspective this actually makes sense. Many people simply have no idea how much debt they’ve accumulated over the past few years. If you are not spending regular time understanding where the money goes, it can be a frightening experience to wake up and see the red, red bottom line.
As you begin the process of budgeting your personal finances, don’t worry about what the facts tell you. Collecting the information from your various accounts might be time consuming, and depending upon what that data tells you, it could even be discouraging. Just make notes of everything you find. How much money is available in your various accounts, savings, credit limits, etc.
Track Reoccurring Payments
If you have set up any sort of recurring payments, make notes of them as well. You’ll want to know what to expect as each month of the New Year comes around. Don’t forget about the occasional expenditures which might not be a regular thing. If you only buy shoes a few times a year, or need haircuts irregularly, simply make note of what you spend on those activities.
Record Cash Spending
It’s also important to understand where you pocket cash is spent. Sometimes it can be a real challenge to account for several hundred dollars every week that came directly out of your pocket. If this might apply to you, consider carrying around a pocket sized note pad and writing down the amount and description of every expenditure you make for a week or two. It can be a hassle to remember this for every little purchase, but if you’re able to, you will get a real sense for how much and what you are spending your pocket money on.
Having a clear picture of what you own and where your money is going is but half of the equation. The next big thing you’ll want to do in the New Year to take control of your personal finances is to develop a plan for where you hope to be by year’s end.
This may be a literal thing if travel is a part of your resolutions, or it could simply mean meeting monetary goals this year. One of the most amazing things about goals and plans for achieving them is that once you’ve done the work to develop a strategy, very often achieving success is easier and much faster than you would have ever thought possible.
Remember, it’s never too late to take a few hours and get your personal finances in order and on track to achieving your goals, dreams and desires. Once you’ve put in the time, you might also consider using some of the amazing online and downloadable tools available on the Internet. It is so much easier to stay on track once you get on track and the software and services available can make that process easy and painless.
Jessica Bower is a freelance writer for Quicken. Quicken offers money management that makes money management easy. Quicken’s products help people get their spending under control with helpful budgeting tips.