Starting 2020 Off Right: Three Ideas for Your Financial Health

As the holiday season kicks into high gear, it is easy to get caught up in the busyness and forget to set aside time to make or update your family’s financial plan. With all the shopping, work and school activities, thinking about your financial plan might be a secondary consideration. By all means, enjoy the holidays and all that comes along with them! But, as you start to think about New Year’s resolutions, how about resolving to shore up your financial planning. Here are some things to consider trying:

  • Do you have a plan? It will of course be easier to update a plan if you actually have one. With that said, it is never too late to start. There are many, many, books, self-help manuals, blogs, etc., that can help you to get started. The key is to pick one that feels right to you and just start. Keep it simple. Start with the major items such as your budget. Are you truly aware of what you are spending?  Are you being deliberate with what you are spending?  Keep track for 30 days and you just might surprise yourself.
  • Save – Do you need to hear this again? Yes, you do. This may seem totally obvious, but savings is liberating. As many others have said, “Pay yourself first”, or in other words, set aside your savings before you budget the rest of your spending. This way you will always have access to cash should you need it and you will always live below your income level, which could be very handy down the road. If you start with putting $50 into your savings account every time you get paid and skip buying the $3 coffee every day, in just four years, you would have more than $10,000 saved up.
  • Sweat the big stuff – Many times we have heard the adage, “Don’t sweat the small stuff”, and in many cases in life this is true, especially when it comes to perfection and activities that do not require perfection (think a .300 batting average in baseball; not perfect, but pretty good.) Saving regularly on a smaller scale is a good plan. However, what about a larger expense, like a car? You can buy a new, expensive car, and let’s say the monthly payment is $700. This is $8,400 per year. It will probably take five years to pay it off, or a total of $42,000, and by the end of the five years the car is worth half of what you paid for it. And that doesn’t include the down payment, nor the insurance premiums. But, let’s say you buy a less expensive car, or perhaps a “previously occupied” (aka used) vehicle?  Perhaps the payment is $450 per month?  The same math results in about a $15,000 total savings, or about $3,000 per year.

These three things are simple things to do. It ultimately comes down to making financial planning a priority rather than something nice to do. In order to get better at something, most often, we need to develop new habits. To do this, you need to make a conscious choice to make good decisions with your money and to be intentional about the things you buy.

Need help getting on solid footing with your financial plan? Start here.

The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

The views expressed are those of BerganKDV Wealth Management. They are subject to change at any time. These views do not necessarily reflect the opinions of any other firm. Investment advisory services and fee-based planning offered through BerganKDV Wealth Management, an SEC Registered Investment Advisor.


CATEGORIES: Wealth Management
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