Now that the holiday season has officially come to an end perhaps you are still reviewing the bills for the gifts you gave? Unless you gave yourself a strict budget and used cash for purchases you may have overspent what you intended. Between Thanksgiving, Christmas, New Years, and Valentines Day the $$$$ signs stack up! Do not let this get you excessively stirred up, because in the end I bet you made amazing memories with your family and friends! Memories are always priceless! Now you can refocus how you spend your assets and where the best areas are to save money. Refocusing how you save and spend your money after the holiday season is a important step in your financial success! There’s no time like the present.
BUDGET, THE DIRTY 6 LETTER WORD!
The first and easiest step to getting back on track is by creating a budget outline. I have one client who could now teach a college course in budgeting and he has taken my suggestions to heart in tracking all costs for he and his wife. They are about 7 months in to keeping track of everything. They are almost retired and it was shocking for them to realize how much they were spending in some categories. Nearing age 65 healthcare total costs can make up a major percentage of a retiree’s budget. These costs also increase 12-15% per year in retirement. You can see that adds up quickly! Obamacare can’t help with retiree’s insurance and health costs. Sadly, most of my clients roll their eyes when I mention budget; they look at me like this is a dirty 6 letter word! Truth can be painful while enlightening and this impact may be just what you need to see to decide to change your spending habits. Use an Excel spread sheet, there’s even a budget form in the program or a piece of paper. Use Quicken or if you use the financial management website it will devise a budget for you based on your spending habits. If you’d like me to send you a sample written budget sheet send me a message and I’ll email it to you.
YOU are the most important bill you have each month! Paying yourself first, yes FIRST is essential to enhancing your financial savvy and security. SAVINGS! It is important to save money every month. You never know when unexpected expenses will arise; health issues, car issues, home repairs, unexpected income taxes and so on. Your savings header can be two or three parts depending on your cash flow. Short term savings, retirement plans and outside investments are good headers to use. To have success in retirement, you absolutely must save 15% of your earned income. Taking personal responsibility is the first step. Nobody changes habits overnight and like my client you will find that a budget is both enlightening and empowering at the same time. Feeling in control of your finances is so important to your mental health and well being!
If you employ this process, I will guarantee you will look forward to the comparisons between months and categories. Change is a slow and deliberate process. Seeing figures on paper or on your computer screen will bring you several ‘ah ha’ moments. I find this true myself! Another advantage is the budget process can effectively help you plan for future holiday seasons, trips and other essentials. Planning puts you in control so you won’t experience shock and awe when the next holiday season rolls around.
Planning now for your future is an essential Financial Strategy for Life!