Where is your money going? Three tips to managing finances in the new year
By Ameerah C. Palacios
The New Year brings excitement and a time to renew one’s focus on goals. Many make promises that they will do more volunteer work, lose weight or get a new job. Most have a resolution tied to how they manage their money. Whether you want to save more for college, a new outfit or shoes for prom, or even buy your first car, part of preparing for managing your finances means putting a plan in place and sticking to your goals.
Set your top three goals. Many people make the mistake of wanting to do everything at once. In fact, accomplishing your financial goals may mean doing things slowly and gradually over time. Your financial goals may take longer than a year. It’s important to be realistic with yourself, and set a reasonable time frame. Focus on accomplishing a few things and put all of your efforts behind those goals to make a maximum impact. Here’s a quick tip to help you start: look at what you’re spending. Collect receipts and keep a journal of what you spend for a month to see where your money is going.
Set a budget. Once you know what you’re spending, you will know what you can start cutting back on in order to save. Ask yourself the tough questions and set figures that you know you can stick with. Part of keeping to a budget means making a few sacrifices. You may have to tell friends and family that you cannot hang out sometimes because you’re trying to watch your budget.Be comfortable saying “no” to things you don’t need.
Stay on track. Whether it is keeping track on your mobile phone or keeping a spreadsheet on a laptop, stay organized on what you are spending. Are you staying true to your goals and your budget? If not, trim and revisit you goals and determine whether they are realistic. It’s okay to revise and start again.
Remember, managing your finances is a process and not an end result.