The New Year frequently motivates folks to think about money issues — specifically improving one’s finances. But sometime folks then delay any action because they’re unsure what’s best, prefer to avoid thinking about details or find some other reason.
Yet there’s a fairly easy plan you can follow to get started and benefit from. Consider these moves:
- Identify your priority goals. Many of us have multiple competing goals. But frequently some goals can be reached over shorter time periods than others. Or some may provide a more significant pay back than others. Rank your goals in terms of priorities — what is most significant or pressing for you at the present time.
- Have a plan. Align your actions with your priorities. What actions are you taking that support achieving your priority goals? Do you really know what you are spending? What might you change to free up additional monies toward savings or other priorities?
- Is your plan something you keep in your mind only? Or do you trace the moves via a written budget or written spending reconciliation? Having a written plan of action, monitoring and tweaking the plan as needed for 2 or 3 months is a critical step for success.
- Develop a preliminary tax estimate. This is especially important this year since several significant tax changes became effective in 2013. Some popular deductions have ended, others now have changed criteria and some new taxes may now impact you. So creating an early, preliminary estimate will provide you with better insights as well as some lead time for addressing. You may find, as an example, that an adjustment in tax withholding is in order. Plus a review may prompt you to pursue more proactive tax planning for the next year.
- Commit to action. Yes, just get started. Addressing these issues need not require a lengthy period. Following through with these moves, even if on an informal basis, will lead you to greater clarity about your finances.
By making the commitment now, you can complete each of these tasks within 2 to 3 weeks. What a positive way to begin the New Year!