With the new decade quickly approaching, we encourage taking this opportunity to evaluate your current financial plan. It is crucial to ensure that your plan has you set up for short-term and long-term financial success. By following these simple steps, you can ensure that your plan is working for you and your goals.

1. Identify Your Long-Term Financial Goals

Long-term financial goals could include anything from buying a home to planning for your retirement. Taking a moment to reflect upon what is truly important to you in the future will help you visualize what it is that you have to save for.

2. Identify Your Short-Term Financial Goals

Are you thinking of taking a family vacation this summer? Identify what you want to do over the next year and make them a reality through effective budgeting. Make a list of these things that you want to save for and prioritize them.

3. Review Your Current Process

Review your last year of spending and saving habits and identity if you have been making steady progress towards your goals. If not, then it is time to reevaluate your current plan and implement new spending habits. Do not become discouraged if you aren’t on track! This is why it is essential to reflect upon your current process, correct mistakes, and create a new process.

4. Creating A New Financial Plan

Categorize your goals into needs and wants. Decide what is most important for you in the long-term and short-term. Next, calculate how much you have left after your monthly bills and payments. These include rent and mortgage payments, utility bills, food expenses, etc. Once you have calculated your remaining balance, allocate funds towards your financial goals by prioritizing your crucial goals.

An example monthly budget may look similar to this:

Income: $3,500
Rent: $ 1,400
Utilities: $150
Transportation: $400
Insurance: $400
Food: $500
This allows for $650 to be saved
Retirement: $350
Yearly vacation fund: $150
General savings: $150

5. Tweak Your Plan

If you realize that you have more wiggle room in your budget every month, consider allocating more funds towards your goals. It may be easy to see those extra funds at the end of the month and have the urge to spend it, but allocating more towards your crucial goals will enable you to reach your long-term financial happiness. Of course, it is important to enjoy yourself along the way, but be sure that spending falls in line with your overall financial plan.

Budget Better in 2020