New Year is the time to reevaluate finances

By: Suzanne Gellman, University of Missouri Extension
Date: January 1, 2014

The New Year is a great time to take charge and re-evaluate finances.  Part of being Money Smart is looking at your financial priorities and setting or reviewing your financial goals.  If you are like most people, life changes and so some goals may no longer apply, or others need to be adjusted based on your current situation.

Visualize yourself achieving your goals.  Have you considered creating a vision board?  This is a board of pictures of the things you want to have in your life – what do you want to do?  What do you want to have?  And what do you want to be?  All of these questions usually have financial pieces to them that should be part of your financial goals.  All you need to get started are some magazines, a scissors, some glue, and a large piece of paper!  If you’re artistic – maybe all you need is paper and pencils or paint.

When you put your goals on paper you are more likely to reach them – especially if this includes an action plan.  How much are you going to save each week or each paycheck or each month to reach your goals?  How are you going to save it?

Find money to save.  When was the last time you took a look at how you spend money?  Look for ways to reduce or remove a few spending areas here or there over time so you can redirect the money to your financial goals.  Challenge yourself to keep track of your spending for 30 days, or at least a few weeks.  Review your spending – are there areas where you could set more realistic limits?  If there is no extra money to save, can you think of ways to bring in a little extra money to help fund your goals?  Do you have a hobby or talent you could use to make some extra money?

Take control of your money by creating a plan.  Many people spend without a plan and thus end up living paycheck to paycheck, when in reality, there may be more available to re-direct to financial goals than you think.  A spending plan can help you set limits and help balance your spending and saving.  Try using cash for a few months as a way to live within any plan you create for yourself; especially for areas where you might tend to overspend (i.e. food, entertainment, clothing).

Make savings a habit.  Saving is key to reaching financial goals.  The more you can automate your saving, the easier it will be to reach goals. Check with your employer and your bank or credit union to help you figure out how to have money deposited automatically into a special savings account each paycheck (hint: don’t keep it in your checking account).

Pay yourself first!  Pay yourself like a bill.  Finding a way to move even $10 a week to savings is $500 over a year.  Now that is a Money Smart way to start the New Year!

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