Now that it is the start of a new year it is important that you step back and review your financial footprint. Time to consider a few Financial Tips to Start the Year:
- Inflation – the cost of goods/service have gone up so make sure you adjust your budget accordingly. For example, for many of us our benefits reset so there could be an increase in your premium or flex spending withholding. Remember your cash flow plan has to balance to zero so if you’re medical premiums go up you need to reduce another category.
- Budget Check – speaking of which… The holiday spending season is over. It’s time to check in on the budget! Remember, you should be doing monthly checks on your budget spending. But if you’ve been off the last couple months, now is the best time to get back on track to start the year off right!
- Retirement – are you saving enough for yourself? If you follow Dave Ramsey’s recommendation (which I do) you should have a fully funded emergency fund prior to saving for Retirement. Assuming that you have 3-6 months in your emergency fund you should strive to save 15% of your income into a Roth or pre-tax retirement plan. Don’t wait on saving for retirement because the sooner you start, the more time will work in your favor (time value of money). A couple of questions to consider are:
- Am I saving enough?
- Are my investments diversified?
- Am I taking advantage of free money from my employer?
- Organization – you have probably already started getting tax documents in the mail (1099, W2, etc.). I would recommend getting a folder so that you can consolidate all these important documents to one place.
And to “wet your whistle” for next month’s FFF, I would think we should take a moment and talk about the joy in giving! One of the things I love about my beautiful bride’s “Mission to Save” is that it allows us to give more. Send us a note and let us know how you give more as a result of what you have saved.
Fourth Friday Financial (FFF) is written by Mary’s Dear Hubby Andy, because he was “voluntold”. 😉 We have been together for 2 decades and you will begin to see that our differences compliment each other well. Through this monthly series we hope you find practical information for taking control of your finances.