Having a specific goal for building your savings will help you in the long run, but the key here is to actually follow through.
NEW ORLEANS — The New Year is just around the corner. This is usually the time when we start thinking about New Year’s resolutions.
Usually our thoughts go straight to fitness or travel goals, but some financial experts suggest that you might want to think about money as well.
“It’s good to maybe think about creating financial goals for the year. The new year is a good time to look back on last year, and what do you want to improve this coming year, it’s also kind of a good reset point.” said Gregory Ricks, a financial asset advisor, at Gregory Ricks and Associates.
Ricks said there are a few things to keep in mind as you plan ahead. A good place to start is making a commitment to track your spending. Always being aware of what you spend and where you spend it can make it easier to decide where to cut back.
“Make sure you have a budget or spending plan. I think a lot of people don’t. So that’s where it’s really important to have a savings plan. Sometimes you don’t know if you have margin or room in your budget until you break it down,” Ricks said.
He says having a specific goal for building your savings will help you in the long run, but the key here is to actually follow through. Getting an accountability partner, much like the one you get when you’re trying to stay committed to the gym, can keep you on the road to reaching your savings goals.
“Share your goals with someone and let them check in, you know,” Ricks said. “A lot of business development is done with accounting partners to check that you’re working towards your goal. It could be a friend, it could be a mentor, it could also be a colleague.”
Another thing to consider is getting your debt under control. Being aware of your debt-to-income ratio is the first step in determining how to pay off those debts. Ricks recommends that you follow one of two strategies to get your debt under control.
“Part of that could be a great goal to pay off debt next year, or get rid of credit card debt, there are two methods, the avalanche approach or the snowball approach avalanche does this according to starting paying off the highest interest rate and going to the lowest interest rate last, or my favorite is the snowball, where you categorize your debt from smallest to largest, and start paying off the smallest and then apply that money to the next one down the road,” he said .
As you figure out the best strategy for you and your family this year, Ricks says the most important thing to do is get yourself a savings plan.
“Do you have an emergency plan?” he said. “It could just start small. It could be and I say small, it could be if you don’t save anything, save 25 a month for 50 a month or even if it’s a smaller number.”
No matter which of these tips you decide to pick up on, Ricks says you have to start somewhere. He said starting small and being realistic is key to actually staying on track with these financially focused New Year’s resolutions.
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