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6 Important Things To Know About Your Finances Before The Year Ends

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Finances

The end of the year is the perfect time to get a handle on your Finance situation. You will want to start out the new year on a good foot. Take time to get organized and closely examine where you are financial. Whether you are anxious about your money, or you feel secure but want to continue to improve, here are some tips that can help you.

Know Your Retirement Finances

One of the first things you should have a handle on regarding your finances is your retirement savings. If you aren’t sure where it is, you should locate your 401(k). You may have multiple retirement accounts from former jobs. You should compile this information all in one place and try, if possible, to consolidate these accounts into one. You should also know your retirement benefits as they pertain to your current job. Does your company offer an IRA or 401(k) matching program? If you aren’t sure of where you stand with your retirement savings, speak to a financial expert to create a plan that works for you.

Know Your Expenses

Knowing your necessary expenses each month is crucial to your financial health. If you aren’t aware of what you need to spend each month, you won’t know what you need to do in order to save more money. It can be easy to just pay your bills without really keeping track of what everything costs. The goal is to become aware of what you are spending on each expense, including medical costs, utilities, car payments and rent. Don’t factor in your recreational spending yet. Just focus on the non-negotiables in your life.

Know Your Habits

Once you have pinned down your necessary expenses, you can move on to your recreational spending habits. Be completely honest with yourself as you do this. That manicure you get once per week? Write it down. Your daily coffee at the corner coffee shop? That goes on the list as well. You may want to make a note on your smartphone every day whenever you make an unnecessary purchase. Then, at the end of the month, you can figure out which areas are problematic for you.

Know Your Budget

Pull your expenses and habits together into a budget as soon as you can. Look over the information you have gathered about your non-negotiable expenses and the recreational activities you like to spend money on. Your budget should cover all your needs and some of your wants. You should also put aside money into a savings account for emergency costs, such as loss of a job or a hospital stay. Try to stick to your budget no matter what and make sure all people in your household are also on board with it.

Know Your Debt

If you don’t have any debt, you should pat yourself on the back. If like many people, however, you do have debt, you should work on paying it off as soon as possible. The first thing to be aware of is how much debt you have and where it is coming from. Credit card debt is a huge problem for many consumers. Look at how many cards you have and how much you owe. Then go about making a plan to pay off these debts in a timely manner. You’ll feel much better and your finances will be healthier once you are out of debt. If you need assistance, don’t hesitate to contact an accountant or financial planner to help you come up with strategies for tackling your debt.

Know Your 5-Year Plan

A five-year plan can be incredibly helpful when trying to reach your financial goals. Maybe you want to buy a house, have a baby or move to a new city. These are all things that can be part of your plan.

Money can be a tricky subject, but there is no time like the present to try to help yourself improve your financial health. Try a few of these tips today.

 

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