This year is the perfect opportunity to take control of your finances! Due to COVID-19, almost everyone’s financial situation looks a little different than in previous years. With business owners closing their doors and over 20 million jobs lost in the U.S., saving for your child’s education or retirement might not have been at the top of everyone’s priorities last year. Life getting “back to normal” is a great opportunity to get your finances on the right track.
5 Easy Steps to Get Your Finances in Order
1. Create a Budget
Creating a budget and sticking to it is key to getting your finances in order. An easy way to start is by tracking your money and determining if your spending habits align with your financial goals. Also, create a spreadsheet and write down your monthly expenses including, clothing, eating out, and entertainment. Having your expenses written down will help you see where your money goes each month and what you need to cut back on.
2. Pay Off Debt
Most of us have some form of debt that we need to pay off, whether it’s credit card debt, student loans, or car loans. Reducing your debt is a step forward to getting your finances in order. Make sure you pay at least the minimum balance each month, so you don’t get hit with late penalty fees and ruin your credit score.
3. Set Up An Emergency Fund
This past year has shown us that it’s important to save for a rainy day. It’s recommended to have saved between two and three months of income in case of an emergency. Whether you need car repairs, to move, or you lose your job, having a cushion in your savings will help you financially.
4. Organize Financial Documents
Spend time gathering and organizing important documents, including tax forms, bills, and receipts from the past year. Create a folder where you can easily access and store these documents to help you stay organized and on top of your finances.
5. Make Long-Term Goals
When financial planning, it’s important to have long-term goals to work towards, whether it’s to buy a house or to start preparing for retirement. The earlier you start planning, the longer your money has to grow and the better off you will be when the time comes.
There’s no better time to start getting your finances in order than now! The professionals at Calabrese & Associates, P.C. have the skills and experience needed to help you get your finances on track. For more information on the services we provide, visit our website today!