Written by: Jenny Gattinger, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
A new year, new beginnings!
What better time to get your finances organized and start putting your money to work for you? Enough saying that you’ll do it tomorrow. There’s really no better time to start than today.
5 tips to level up your finances this year
1. Determine your money goals
Ask yourself what your financial priorities are for the upcoming year. Are you looking to get serious about paying down debt? Do you feel secure with the amount of money in your emergency fund? Maybe you’ve decided that it’s time to finally start investing for your retirement. Whatever your goals, make them SMART (Specific, Measurable, Achievable, Realistic, and Timely).
Let’s look at an example. From the SMART perspective, saying that you want to “start saving for retirement” is not enough. Deciding that you want to put 10% of your salary into your 401(k) every month is both specific and measurable. Furthermore, you can take a look at your current budget and spending habits to determine if contributing 10% of your salary is indeed achievable and realistic in your situation. Finally, your timeline for this goal would be 2021, or 1 year.
2. Look at your current expenditures
Being aware of where your money goes is a fundamental step in improving your finances. Look through your financial statements to see how much you have spent each month on housing, food, transport, insurance, entertainment, etc. Also, take a look at what subscriptions and recurring expenses you currently have. While you’re at it, make sure to cancel any of those memberships that you are not getting full use of. Start the new year off strong by tracking your expenses with the Goodbudget expense tracking app or the like. Tracking as you go will keep you on top of your expenses and prevent you from finding unwanted surprises later down the road.
3. Review your current portfolio
Are the financial goals that you’ve previously set still on track? If not, make tweaks to your portfolio accordingly.
4. Automate your savings/investments
Take a few minutes to set up automatic transfers from your checking account into your separate savings and/or investment accounts each month. Not only can you “set it and forget it,” but by not actually having access to the money, it makes it harder to spend. So, before you pay the cable guy, Netflix, and invite your friends out to dinner, automatically set aside money just after receiving your payday deposits to pay yourself first!
5. Beef up your emergency fund
There has been no better year than 2020 to illustrate the importance of having an emergency fund. While financial professionals traditionally recommend having a 3-6 month emergency fund set aside, considering the current state of the pandemic and the unknowingness of the upcoming year, you may feel more comfortable having up to 1 year of expenses socked away.
If you find yourself in a situation where you know that you have room for improvement but are unsure where to start, it’s your time to take action. You can do that by diving into one of the recommended financial books or scheduling a free 10-15 minute chat to discuss your goals.
What better way to kick off the new year than by feeling more confident about your finances?
Jenny Gattinger, Executive Contributor Brainz Magazine
Jenny is a personal financial coach with a passion for helping millennials reach their financial goals. Having completed a degree in Economics, along with Dave Ramsey’s Financial Coach Master Training, she teaches them how to organize their money and put it to work so that one day, sooner rather than later, they won’t have to. A millennial herself, Jenny’s financial savviness has allowed her to follow her dreams of travel and visit 50+ countries as well as compete internationally in two different sports, all while maintaining a sense of financial wellbeing.
