The beginning of a new year is often a time to think about your goals and measure progress you have to achieve during the past year. Personally, I prefer to use the New Year is also a time to refocus my finances. Let me share with you my financial checklist, an excellent tool that can be helpful in allowing you to live as you want throughout the coming year:
1. establish an emergency fund.
Life is unpredictable and an emergency fund can prepare you for whatever may come your way. This should be your first step towards improving your financial health because it can prevent the need to take a loan for unexpected expenses. If you were to use your emergency fund during the previous year, you must plan to restore the funds back to normal.
2. Identify your goals.
List your short and long term financial goals so that you know exactly what you save money. These can include anything from a vacation to come to buying a home. Writing all of your goals or review your progress each year can make purchases appear achievable rather than just a dream. It can also make it easier to reduce unnecessary expenses.
3. Except for retirement.
Make sure you save enough money for the retirement you want. Keep in mind that when you start saving is as important as how much you save, so start early. If your employer matches a percentage of your contributions, make sure you save as much as they are essentially offering "free money". (Who does not?) In addition, reassess the risk of your portfolio based on when you plan to retire. If you started recording, you can afford to take more risks and invest more in stocks than bonds. As you approach retirement, you should become more risk averse so you can retire comfortably.
4. Pay down your debt.
Be sure to always pay at least the minimum amount due for any debt to avoid charges or penalties. If you have a large amount of debt, focus all principal payments that are above the minimum to your highest interest debt, specifically the credit cards. If the interest rate on your debt is low enough, you might just be better to pay the minimum payments and put the money in your retirement that the return on investment can be higher than the cost of interest.
5. Review your current insurance policies.
Have you built an addition on your home last year? Is there a new driver in your house? Ask yourself if there were there other types of new exhibits that you should include on your insurance policies. Review your policy and speak with your independent agent each year to help prevent future losses and keep you on track to achieve your goals.
Are there other steps you take each year to improve your financial health? Please share your suggestions in the comments below. A happy and prosperous New Year!
0 Komentar