2020 is officially in full swing, and it’s a great time to revisit your financial goals and make note of any deadlines for the year ahead.
So, here are 3 actionable steps you can immediately implement today to set yourself on steady financial footing for the year:
(1) Revisit your retirement planning:
Whether retirement is just around the corner or decades away for you, January is a great time to assess where you stand with your retirement savings balance, whether you can increase your contributions in this year, and if you need to make any adjustments to your investment allocation in your retirement accounts.
For 2020, you can contribute up to $6,000 into your IRA and up to $19,500 into your 401(k), TSP, or 403(b) plans.
(2) Audit your spending & emergency savings:
We might as well call emergency savings the “when the sh*t hits the fan” fund because that’s exactly what it’s there for. If your car needs an urgent repair, the heat goes out, or you experience an unexpected layoff, be sure you have a healthy emergency savings balance in place.
Our general rule of thumb is to have three to six months’ worth of your fixed living expenses in your emergency savings, so you can keep a roof over your head and mouths fed if the worst happens, or take care of any unexpected repairs or replacements.
If you had a change in income, you’ll want to adjust the amount in your emergency savings. And if you don’t have emergency savings yet, start by first doing a deep audit of ALL your fixed expenses, including debt payments. If you get hurt and can no longer work, your debt still needs to be paid.
(3) Set up auto-reminders & debits:
Payments for your utilities, rent, phone, mortgage, credit cards, savings or anything that’s a fixed amount each month should be set up on auto-draft or at the very least auto-reminder. The less you have to worry about remembering, the better!
Also, set a “financial check-up date” or “money date” with yourself to track how you have progressed and assign yourself 1-2 action items you want to check-off by your next money date. We suggest starting out with a quarterly date with yourself and set it on your calendar so you don’t forget.
THE BOTTOM LINE:
Finances might not make it onto your New Year vision board but spending a little time at the first of the year to make sure you’re on the right track is never be time wasted.