Early in the year, check your financial wellness and make a plan to reach your goals.
Chances are, you’ve established a household budget and you already have an understanding of your family’s finances. Now, as you plan for the year’s taxes, it’s a good time to revisit your overall budget and determine whether you are still on track to meet your financial goals.
Create Your Own Financial Statement
Start by determining your net worth using assets and liabilities. Assets include bank accounts, stocks and property values. Liabilities include loans, leases, mortgages and credit card debt. Listing all of these will give you a clear view of what you owe and own.
Then, track all of the income that came into your household over the last year. Create an expense column that shows where all of that money went. Compare these past numbers to your current balance sheet to project future expenditures and identify where you may be able to better apply your income toward expenses that further your goals. For example, you might find that you shopped for clothes or electronics more than you realized last year—and in the coming year, you might plan to put a similar amount of money toward paying off your credit card debt.
- Ensure bank account fees haven’t increased. You may need to maintain a minimum balance, use direct deposit or conduct your transactions online to avoid penalties.
- Apply “extra” money you bring in to pay off credit card debt—or if you’re out of debt, toward an account reserved for emergencies.
- Consider putting your tax refund into your 401(k) or IRA.
- Plan your major purchases for the year to capture savings. For example, buy seasonal items such as patio furniture off-season. And buy jewelry long before or after Mother’s Day or Valentine’s Day.
- Know the details of your health plan and avoid out-of-pocket expenses if at all possible.
- Americans Added $36.2 Billion in Credit Card Debt in 2012 (247wallst.com)
- Settling Credit Card Debt – How It Works (nationaldebtrelief.com)
- Why Consolidating Debt to Chuck the Ball of Personal Credit Card Debt Completely (happilyblended.com)
- The Importance of Saving and How Much To Set Aside (investorguide.com)