By, Nancy Jackson, AFCC®
Just the name of the year 2020 seems to evoke a look back at what the past has taught us in hindsight. The problem with hindsight is that we can’t change the financial choices we’ve made, but we can learn and improve on them going forward. Several people have asked me recently what steps I will take to create my own my financial plan for 2020, and so I began to search for fresh ideas, , take notes, look for trends and ask others, but it all came back to solid ‘tried and true’ steps. Steps that will help me and anyone else get a clear picture and take charge of our finances in the New Year ahead.
Set a Goal
Do you want to save for a dream, establish an emergency fund, or make a purchase for something basic you’ve been wanting or needing? Managing finances is not always easy and often requires determination and sacrifices. Turn your goal into a solid vision for motivation to get through the rough spots. (And there are always rough spots with money, right?) Paste an image of your goal where you will see it every day.
Use a Calendar
I like to copy a full year-at-a-glance calendar and highlight all of my pay dates in green (for money of course). Then using other colors, I highlight, all of my monthly bills’ due dates, then both major needs and wants such as renewal of license plate stickers and summer vacation activities or special events and last but not least, I use purple for savings. If saving seems tough, try to plan for a small amount to begin with. You’ve gotta start somewhere!
I’m always surprised at how things pop out that I need to plan for. I like to create cell phone reminders for due dates and occasional expenses. I also have a bill payment journal that I use monthly because I like the old pencil to paper method too. Use whatever form of monthly calendar you like best. Banks often have strategies and suggestions to help us stay on track for saving goals too!
Are you cringing? I get it. This is the least favorite thing for me to do too. But the only way we can find money to save, it to know where we spend it. Some of the most common none-budgeted expenditures are: dining or takeout meals, gifts, gasoline or other transportation costs and “helping out” others. And then there are habits: shopping, cigarettes, wine, coffee, whatever. No judgement, just know the true monthly cost. Nothing can put a damper on a bag of my favorite potato chips then having to record it as an expense!
Monitor Income and Credit Use
Another frequent “I wish I would have” hindsight moment can come when we spend this month based on what we earned and spent last month. Without planning, highs and lows in our income and/or expenses, increase the likelihood of compensating with high cost credit use. Trying to anticipate reduced hours or tips for example, as well as any “could be expected” expenses such car maintenance, or back to school costs, will help us adjust our spending and saving accordingly, and reduce credit card debt. Document any slow times or extra expenses you can think of, in advance, to help with your 2020 planning.
Adjust Our Thinking
Measuring my “in my best interest” attitude is my favorite step. There is an old saying that no one cares more about your money than you do, however I’m convinced there are any number of people and companies out there who care a LOT about my money, and yours too! They want us to spend more, buy on credit, pay more fees, etc., and they spend thousands in advertising to sway us. Let this be the year I review every potential purchase with a question. “How do I benefit from this dollar spent”. Measurements are tricky though. Supporting our local economy and charities offer us many benefits that are difficult to measure, but paying high fees and interest will almost certainly put our dollars to someone else’s best use. We work hard for our money, so let’s be in control of who benefits. And if we don’t spend, our savings may increase our own best interest, literally!
I hope that some of these tips will help you think about what steps you can take to create your own 2020 financial plan. If you are feeling overwhelmed with where or how to start, book an appointment with one of the accredited credit counsellors at CCRC. Appointments are always free, confidential and unlimited.