This past year has been more challenging than usual. With so many obstacles faced in the year 2020, it’s been difficult for many people to get a sound footing on the new year. Whether you are catching up from work-related Covid issues, were evicted or lost your house through foreclosure, or perhaps did better than expected, here are some tips for setting fantastic financial goals for the new year.
Set Realistic Goals for Housing Costs
For all housing costs, consider spending 30% of your income on housing. For renters, that includes rent and utility costs; for homeowners, expect this to have utilities plus your mortgage, maintenance, plus property taxes and interest. Spending any more money on these payments can, unfortunately, put you in the red. When looking for an apartment or house, be realistic, don’t bite off more than you can chew. If you make 2000 a month, don’t lock yourself into a 1000 dollar a month rental agreement. Don’t live beyond your means. Catching up to rent every month can be a significant burden if you cannot make the monthly payments with utilities, groceries, gas, etc.
Prioritize Your Spending
Set aside money for emergencies, you know, for when the car breaks down, with unexpected bills, and if you are finding yourself saying it’s always something! Don’t spend money on unnecessary items. Shopping sprees are excellent for retail therapy, but you might find yourself in the red if you are spending frivolously without money coming in to back it up. Make a budget, and keep track of it and your spending every month. A budget is a financial tool that is written out that allows you to track how much you spend and save every month. A budget will protect you from overspending or not knowing where your money is going, so you can have a finger on the financial pulse of your household.
Save Save Save
The name of the game is savings. Whether you are saving for a vacation, a new car, or perhaps a down payment for a house, create an excellent little piggy bank for your goal. As we talked about earlier, creating a budget will allow you to prioritize your spending to see how much leftover you can afford to earmark for savings. Other ways to save include having a portion of your paycheck deposited directly into your savings account. Also, use the 30-day rule, giving yourself that allotted amount of time to think about making a big purchase. Also, utilize the full match on your employer’s 401k and start saving early for college and retirement.
One of the most critical financial checks to do for yourself is to set financial goals. If you don’t know you’re a destination, you might get sidetracked and get lost along the way. For more financial tips and payment solutions, visit Amaryllis.