New Year, New You

The New Year is quickly approaching and it’s time to start thinking about financial changes you can make starting in January. Do you want to get your personal finances under control? Do you want to start saving?
Based on a New Year’s Resolution study done in January 2014 by the University of Scranton; “Spend Less, Save More” was ranked as the 3rd top New Year’s Resolution. Yet only 75% maintained their resolution through week one, 46% through six months, and only 8% actually successfully achieved their resolutions. In spite of the statistics, we know you can do it, and we want to help.
You can reach your financial goals, save, and take control of your financial future. You just need a little motivation and proper guidance.
There are three main areas you will need to start to focus on:

• File Management (bills & receipts)
• Money Management (budget & saving)
• Credit Management (debt & credit)

Sit down with all your pay stubs, bills, mail, and receipts. Start keeping your receipts if you didn’t before. You will want to have hanging file folders if you have a file cabinet, or just get school pocket folders. Accordion folders also work well. Separate your bills into piles based on company name. Example: pay stubs, mortgage or rent, electric, water, trash, auto loan, credit cards – separate piles for each card, etc. Place receipts with the appropriate bill if you have it. Then go through each pile and put them in date order; most recent first, oldest last. For most things, keeping one year worth of records if sufficient, any tax records/bills should be kept for a minimum of three years. Insurance records, keep for as long as the policy is in force. As new bills arrive, put them in your file or folder, most recent bills on top by date order, this will help you keep only as many records as needed so you can easily pull out the oldest records and destroy them when the time comes.

Make a list of your income and expenses for the next four or five weeks. Pick a day in the last week of this month or 1st week of the next month that works for your schedule. (Plan on doing this once every month on or about the same day – put it in your phone or outlook calendar as a reoccurring event to remind yourself) Have your newly organized pay stubs and bills handy. Start the list with your net income, and then list your expenses. Next to the expense, put the due date. Don’t forget to put savings in your plan, even if you have to start with $5.00. Something is better than nothing, but you should set a goal to increase this as much as possible whenever possible. Subtract your expenses from your income. You want to remember to also save monthly for periodic expenses such as auto taxes, property taxes, etc. If you need to adjust your spending to balance your plan, revisit your “want” expenses such as cable, cell phone, eating out, salon visits, etc. Through the month keep your plan handy, as you pay bills, check them off your list so you stay on track of who has been or has not been paid.

Reviewing your credit reports is very important for many reasons, but initially you should review it now so you can identify exactly who and what you owe. Your credit is just as important as your spending plan, if not more so because this is how employers and creditors view your money management skills. If you have never pulled your credit reports, you can obtain your free reports from www.annualcreditreport.com (free reports due not include your score) or chat with an Apprisen representative and ask us about our Credit Health Education Session where a financial specialist educates you about credit, your credit score, and your reports.

Congratulations! You just made something that used to seem so overwhelming very low maintenance and easily manageable. You’ve gotten organized, you’ve created a plan, you’ve looked at your credit and you know what you owe. The hard part is over, now you just have to maintain these routines. You will want to include any debts into your spending plans that you noticed on your credit that you weren’t aware of before. Start paying it monthly if you cannot pay it off in full. Due not deplete your savings to pay off debts. You should be saving and paying on your debt. The more you look at your plan; you will see where you can free up money to apply more toward your debt while putting money into savings. Apprisen has tools to help you get on track and stay on track, including blank spending plans you can use.
Sign up for our monthly e-newsletter: The Money Minute Blog which includes useful tips and important information related to personal finance.