By George Rose, Wells Fargo V.P., Business Relationship Manager
Now’s the time that many of us have already broken our resolutions for the New Year. With holiday bills still arriving in the mail and being in the middle of tax season, it’s smart to keep those resolutions include taking a fresh look at your financial picture and setting new financial goals and habits for 2014. Do resolutions help? We jumped into January with great intentions. Yet for some, the goal of financial fitness faded into February then dropped off the calendar entirely. The reason why? – They didn’t know where to begin.
These ideas can help you stay on track:
Talk to Your Banker
One great way to get a jumpstart on a new financial plan is to meet with a personal banker or financial advisor. Just like staying on a New Year’s diet, a little support and guidance from a “coach” can help you put together a great plan and turn it into an effective strategy you can stick with.
Set Goals
When it comes to achieving financial success, you need to know where you are headed. Write down your financial goals – down payment on a home, college education for the kids, paying off high credit card balances. Add short-term goals such as saving for a vacation because early success can encourage you to keep going long-term. Some financial institutions offer online tools that allow you to establish savings goals and monitor your progress toward reaching them. Be specific about the amount you will need and the target date for reaching each goal, then set up a savings plan that will get you there.
Take Stock
Add up all of your expenses for at least a month. Again, some financial institutions have online tools to help monitor transactions and track spending. With many online services, you can download transaction records directly to personal finance software thereby making it even easier to monitor your costs. No more sifting through shoeboxes stuffed with receipts at tax time! What’s more, online services could help you reduce taxes by keeping track of every deductible expense.
Make two lists of expenses – One for essentials such as mortgage, taxes, food, and insurance and one for non-essentials such as entertainment and clothing. You may be surprised at how much you’re spending on the non-essentials. Sign up for online banking and online bill payment services which allow you to set up automatic payments for recurring expenses.
Cut Costs
How can you save when you spend every dime to meet expenses? You don’t need to live like a miser to trim dollars from your monthly expenses; yet you do need to pay attention to every purchase and avoid impulse buying. Look again at those costs – you might find considerable savings. Also, talk with your insurer about how you can lower your insurance costs; and shop around for discounts. For example, many insurers offer a discount if they insure your home and your vehicles.
Cut Credit Card Debt
If you have large credit card balances, consider a home equity loan to pay them off. The interest likely will be lower than that of credit cards, and your tax adviser can tell you if the interest qualifies as a tax deduction. If a home equity loan is not an option, you still can pay down the balances.
Start Saving
Start now, even if it’s just a few dollars a week. Ask your financial adviser about a 401(k) and other direct-deposit accounts that move money straight to savings or investment funds. This process makes savings much easier and a 401(k) can cut your tax bill. If your employer matches your 401(k) savings, try to have the maximum deducted each pay period.
Be Flexible
Treat yourself to small splurges once in a while and don’t get discouraged if an unexpected expense throws you off your budget one month. Just get back on the financial fitness track.
The most important step you take on any journey is the first one; so jump right in and “March” down the road to financial fitness. Come this December, you’ll be glad you did.
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George Rose is a Wells Fargo Vice President and Business Banking Relationship Manager. He has served in small business banking in Houston, TX for over 10 years. George can be reached via email at [email protected].
