A new year brings new goals, challenges, and outlooks. It is a great time to review your financial life and determine what you need to do to fulfill your dreams, whatever they may be. Here are some tips and considerations when planning the year ahead.
Baby Steps Add Up
Hiking to the summit of a mountain is no easy feat. Many things have to be taken into consideration, like the terrain, the weather, local wildlife, gear, etc.
One of the most important things to consider is your pace. It seems counterintuitive to take smaller steps to conquer a mountain, but many climbing veterans recommend just that.
It is the consistency of those smaller steps that add up over time that allows one to get to the top without expending too much energy.
Overwhelming debt looms just like a mountain, but keeping the right pace is just as important. Those baby steps add up to lasting changes. One of the most popular strategies for starting out is Dave Ramsey’s “7 Baby Steps” program. Each step consistently builds upon the progress you’ve made in the previous step, allowing you to get closer and closer to that summit.
Whether you follow Ramsey’s recommendation or a different strategy the important thing to remember is, just like the hiker, making consistent progress while not overexerting yourself leads to conquered mountains.
Give Yourself Better Access to Your Accounts
Managing your financial well-being is already difficult enough, but having to plan a trip to the bank every time you need to do anything with your account is time-consuming and inefficient.
Online and mobile banking not only give you access to your account balances, they also offer much more. With Astra Bank’s mobile app for instance, you can:
- Transfer between accounts (even external accounts)
- Pay your bills
- Set limits on your debit cards
All of these features and more give you not only better access, but better control over your accounts. This makes keeping on top of your finances much easier and efficient.
Got a Big Expense Coming Up? There’s a Spreadsheet for That
We dread and try to avoid those big expenses like new tires, a new water heater, weddings, etc. We know they will come eventually, though, and it pays to be prepared. Do you have a big life event or big expenditure you know may break the bank? Plan for it by finding a budgeting spreadsheet.
Whether you prefer to use Excel, Open Office, or Google Sheets, there are many budgeting spreadsheets available ranging from simple single personal budgets to all-encompassing family budgets.
Here are great links to explore the different spreadsheets available:
This is just a small group of available, ready-made budgets that can be used. Many of these are free and take very little effort to get started.
Even a Small Emergency Fund Provides Relief
When you’re starting from scratch, saving up even a little can be both frustrating and difficult, but even smaller amounts can provide stress relief when unexpected expenses occur.
Many emergency fund articles will cite needing 3 to 6 months’ worth of living expenses in an emergency fund which amounts to thousands of dollars. Many aren’t in a position to save that amount any time soon, but it’s important to start somewhere and one month's expenses is a good start. Even a few hundred dollars can help relieve stress from an unexpected flat tire or trip to the hospital.
Evaluate the Prior Year
2020 was not a popular year for many reasons, but it does offer an opportunity for us to evaluate our expenses and spending for a year that was extremely unpredictable.
Analyzing your budget should be something done often, and your evaluation allows you to do multiple things:
- Analyze your financial goals
- Identify areas you are overspending in
- Determine how much you’ll need in an emergency
- Figure out upcoming expenses for the new year
Evaluating your prior budget allows you to learn from mistakes and build on weaknesses. Finding the expenditures that took you by surprise and planning for them gives peace of mind. Finally, a stronger and more realistic budget puts you that much closer to achieving your dreams.
Conclusion
The circumstances that made 2020 frustrating and unprecedented will most likely continue into 2021. While the New Year brings fresh optimism, the changes we hope for won’t happen on their own. They must be worked towards using dependable advice and sound planning. Hopefully these tips help build up 2021 to be a great year for you.