It’s a new year, and that means new opportunities to take full ownership of your finances. As with any other major change in your personal life, creating financial health starts with just a few simple steps. It can seem overwhelming, but by taking them one at a time, you will find yourself in a more stable and less stressful place with only a few easy tasks.
Review Your Budget - To begin, get a sense of where things stand. Chances are, some things have changed in your budget this year. Car insurances rates may have adjusted, utility bills may increased, or you may have reduced your credit card debt in the previous year. Review your budget, identifying what items have changed. It would also be helpful to have your bank statements from the previous year available. Look at how your actual spending compares to what your budget was. Did you go over budget on any particular items? If you don’t already have a budget, this is also a great time to start one. Begin by looking at your current spending habits and document where everything is going each month. Then you can identify what opportunities you have to save.
Check recurring charges - While reviewing your bank statements for your budget, this is also an opportunity to look for recurring charges that you may have forgotten about. Did you sign up for a free trial of some online training program that you never touched after the first week? There’s a good chance they’ve still been charging you each month since. Same goes for websites like Hulu or Spotify. Many of these services have comparatively low monthly costs, and if you forget to cancel after your free trial expires, you may not notice the charges if you don’t have a budget or watch your accounts closely. If you are using these services, that’s great, hold onto them. But if they’re subscriptions you barely, if ever, use, now might is the time to go through and cancel them.
See if you can boost your retirement savings - After you’ve gone through your budget and canceled some subscriptions, hopefully you’ve found some money available in your monthly budget to increase your retirement savings! Most Americans simply don’t have enough in their retirement plan to cover the expenses they can expect, and it can be difficult to find a way to change that when you feel like your budget is too tight. With the openings that you’ve hopefully found by now, you can make some increases to your savings to put you in a better position than you were before.
Check your credit report- This is also a good opportunity to check your credit score. By law, you are entitled to a free copy of your credit report from each of the major credit bureaus once a year. AnnualCreditReport.com is a government mandated site run by the bureaus to facilitate this process. While there are a number of free services out there that can provide you your report, they all require the ability to sell your information for marketing purposes. This is the only site that is free while still offering you your privacy. If you would prefer, you can also make the request by mail, you will need to fill out this form from the FTC and mail it to this address:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
Locate any unclaimed funds - Finally, you can take this opportunity to check for any unclaimed funds in your name. These are funds that are in your name but were never received by you for some reason. It may include uncashed payroll checks from previous jobs, or refunds from unused gift cards, or a variety of other sources. Each state has their own process for claiming these funds through the government, and you will need to provide proof of your identity, which may be different for each state. You want to be sure you’re checking an official government source for this search as some individuals have set up “services” online that charge you a fee for these funds, even though they use the same free resources that are available to you. The first place to start would be the US Federal Government site, which can be found here. It also includes links to the relevant sites for each state.
Schedule time with a financial planner - In the same way that you want to meet with a doctor to get the best possible physical health, meeting with a financial planner is the best way to ensure your financial health. Our experienced professionals will review the information you’ve gained in the above steps and show you how to develop a higher level plan. Identifying opportunities to get even more out of the retirement savings you have, assessing your short and long term needs, and developing a strategy to ensure you get the success you deserve. Call us today!