Financial Planning Getting Back to the Basics Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on Tumblr (Opens in new window)Click to share on Pinterest (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Marsha Barnes Published Feb 11, 2021 - [Updated Feb 10, 2021] 5 min read Advertising Disclosure The views expressed on this blog are those of the bloggers, and not necessarily those of Intuit. Third-party blogger may have received compensation for their time and services. Click here to read full disclosure on third-party bloggers. This blog does not provide legal, financial, accounting or tax advice. The content on this blog is "as is" and carries no warranties. Intuit does not warrant or guarantee the accuracy, reliability, and completeness of the content on this blog. After 20 days, comments are closed on posts. Intuit may, but has no obligation to, monitor comments. Comments that include profanity or abusive language will not be posted. Click here to read full Terms of Service. If this past holiday season looked and felt a lot different than previous years – understand that you are not alone. The unexpected rollercoaster ride that 2020 forced us to take part in was one for the books that created more than enough opportunity to truly prioritize what served as important factors in our lives. While there are still a lot of unknowns on the horizon, one key area we absolutely know must be in order is our finances. Whether you’re recouping from job loss, illness, or unexpected expenses, let’s dedicate some much-needed time to refocus our attention to ensure our money works in our favor – with the right execution plan. Refinement is the name of the game Typically, every year many people attempt to create a strict budget. In theory, there’s absolutely nothing wrong with this – as long as you’re able to adhere to it and follow through. Where this can get tricky is many people create a budget that’s unrealistic and emotions of defeat swiftly knock. We all know how this ends up – you’ve abandoned the pre-work and merely fall back into old habits. In order to set something that’s reasonable and restrictive where necessary, refine your current budget. This approach shifts your perspective and doesn’t create such harsh goals that will make you feel they’re unattainable. Identify at least two areas you would like to work on within your current budget. For example, let’s say eating out is a problem area and you want to dedicate more income to savings. First, review at least 2-3 previous bank statements to obtain real information about how much you spent over the course of time. Now, choose your ‘new’ number that will now become your maximum for ordering food. By evaluating what you’ve previously spent on eating out and identifying the new number you’d like to establish, you have now created a pathway to crush your new goal. If swiping your debit card serves as a daily temptation, adopt a cash system. Once that money dedicated has been depleted for the month (or pay period), that is your cut off. For remaining funds left over, throw the extra into your savings account. Developing new habits with very old tactics has serious benefits. Your goals aren’t impossible, but there has to be a fresh approach adopted to see them through. Tackle newly acquired debt Let’s admit it, last year was rough. A lot of things ended up happening that should or should not have. If you fell into some new credit card debt or still handing remnants from previous years – take a breather and remember life happens. Review all credit card statements, potential medical bills, or anything from creditors and list them all cohesively. While this can be done on pen and paper, for easier tracking be sure to also create some sort of online document. You’ll be able to see them compiled with due dates, amounts, and creditors. It’s recommended to handle high-interest accounts first, but personally take inventory of what works best for you. Starting with the lowest amount owed also has benefits, as this builds up personal momentum. We all love to celebrate wins along the way and our finances are no exception to this. Each of us has different motivators and the common denominator for both scenarios is that debt is actively being paid off! Save, save and save some more As cliché as this sounds it holds very true – every penny truly counts. No amount too small that you or your family will not benefit from by saving. One of the easiest ways to guarantee money regularly flows into your savings account is by setting up an automatic draft every pay period. This can be established by setting a percentage or a set amount. Remember, that isn’t the only method that can be used. If you have remaining money in your checking account, this money can also be deposited into your savings. Any unexpected money can be dedicated to beefing up your savings account. Last year showed us the importance of having an emergency account that can be leveraged and this year (and every year) it still rings very true. Start where you are with what you have. If you’re unable to dedicate a set percentage at this time, it’s okay – it’s only temporary. Planning ahead and saving for recurring bills also alleviate the burden of having a shortage later. Expenses that may not be due on a monthly system can be broken down and saved over a course of time. While none of us could have predicted the damage that last year brought onto so many, we owe it to ourselves to do our part in making sure we make conscious financial decisions. Remain positive We don’t know what the future holds but we have the choice to operate from a place of gratitude. Will we make all of the best and most sound financial decisions? No. Will everything go perfectly and according to our plan? Not a chance. However, we can make the daily decision to keep our hearts and minds on the positive things. Every year brings new challenges and it’s our responsibility to stay the course and see our personal finance goals through. Accountability partners can be essential in providing us thoughtful words even when our minds don’t. Set up a recurring, virtual monthly finance chat with close ones to help keep you on track. Solicit the assistance of a financial advisor that can serve as a sounding board to help provide guardrails or a listening ear. Don’t dwell on what wasn’t accomplished last year (or the previous years), every day is a new day to implement new things. Previous Post Asking for a Promotion in an Unsteady Market Next Post How, Where, and Why to Use a High-Yield Savings Account Written by Marsha Barnes Marsha Barnes is a finance guru with over 20 years of experience dedicates her efforts to empower women worldwide to become financially thriving. Financial competency and literacy are a passion of Marsha’s, providing practical information for clients increasing their overall confidence in their personal finances. More from Marsha Barnes Visit the website of Marsha Barnes. Follow Marsha Barnes on Facebook. Follow Marsha Barnes on Twitter. Browse Related Articles Mint App News Intuit Credit Karma welcomes all Minters! Retirement 101 5 Things the SECURE 2.0 Act changes about retirement Home Buying 101 What Are Homeowners Association (HOA) Fees and What Do … Financial Planning What Are Tax Deductions and Credits? 20 Ways To Save on… Financial Planning What Is Income Tax and How Is It Calculated? 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