Money Analysed

Top 10 Money Moves for a Fresh Financial Start

The start of a new year is a chance to look ahead and make a fresh start. For many people, that means setting new resolutions and making changes in their lives.

One area that often is overlooked but is crucially important is your finances. The start of a new year is a perfect time to review your financial situation, set new goals, and refresh your financial strategy.

Its an opportunity to recalibrate and take intentional actions to put yourself on the path to financial wellbeing.

Reasons to Make Financial Changes

Refreshing your finances and recalibrating your financial strategy can lead to many potential benefits. It can help you manage your money better, reduce stress over your finances, and put you in a better position to meet your long-term financial goals.

It can also help you avoid major financial setbacks in the future and give you more financial security. Perhaps you want to make more progress with your debt or increase your emergency fund.

Maybe you want to start saving for a home or plan for retirement. Reviewing and updating your finances can help you identify what you need to do to achieve these goals.

Top 10 Money Moves for the New Year

1. Reviewing Money Goals: Take some time to review both your short-term and long-term financial goals.

Are you making good progress? What adjustments can you make to meet those goals?

2. Preparing for Tax Time: Start planning for your tax bill now to avoid surprises come April.

Consider working with a tax professional to ensure youre taking advantage of all available deductions and credits. 3.

Boosting Emergency Fund: If you dont already have at least three to six months of expenses saved up, start working toward that goal. Aim to save up $1,000 initially and then gradually build up from there.

4. Adding to Retirement Accounts: Review your retirement savings strategy and determine if there are any adjustments you need to make.

Consider increasing your contributions or changing your investment strategy. 5.

Increasing Income: Consider pursuing a side hustle or generating passive income streams to boost your income. Explore opportunities in your area of expertise or in areas that interest you.

6. Checking Credit Score: A good credit score is key to getting better interest rates on loans and credit cards.

Take action to improve your credit score if necessary, such as paying down debt and making on-time payments. 7.

Automating Finances: Setting your finances on autopilot can be a powerful tool for staying on track with your goals. Consider setting up automatic contributions to your retirement savings and bill payments.

8. Double Checking Life Insurance: Review your life insurance coverage and determine if you need to make any changes.

Consider whether whole or term life insurance is a better fit for your situation. 9.

Creating a Budget: Establishing and following a budget is critical for managing your finances effectively. Consider using a budgeting calendar to stay on top of bills and spending.

10. Taking Care of Yourself: Lastly, taking care of your mental and physical health can help you maintain a positive outlook and stay focused on your financial goals.

In Conclusion

By focusing on your finances and taking intentional actions to reach your financial goals, you can create a brighter and more secure future for yourself and your loved ones. The new year offers a perfect opportunity to review and update your financial strategy, set new goals, and take steps to achieve them.

So, take a deep breath and dive in; the journey to financial wellbeing starts today!

3) Importance of Setting Financial Goals

Money can be a significant source of stress in our lives. Financial goals can help us to set a course of action that will lead to a more certain financial future.

By setting financial goals, we take some of the stress out of the equation, knowing that we’re working toward a specific endpoint. Goals help us measure our progress and help motivate us to change our behaviors and develop new habits.

Setting and achieving financial goals can create a sense of control over your financial situation. It empowers you to make decisions to improve it and eliminate any stress or anxiety around your finances.

Financial goals provide you with a direction to channel expenses and create a solid budget plan. To set financial goals, its important to establish what’s important to you and be realistic.

Identify what it is that you want from your money, whether its to save for a home, eliminate debt, or retire comfortably. Identify the actions you need to take to achieve these goals, making sure to be specific about deadlines and timeframes.

Keep track of your progress to motivate yourself, and don’t be afraid to adjust your goals to fit changing circumstances.

4) Preparing for Tax Time

As the year comes to a close, it is important to prepare for tax season, which can be a stressful time for many individuals. Understanding tax owing is crucial to avoid potential penalties or interest on any outstanding taxes owed.

If you had a side hustle or ran a small business or realized any investment gains over the year, you may be liable for additional taxes. Ensure that you have accurately reported all of your income and expenses as they are vital in determining your tax bill owed.

There are several tools and resources available, such as IRS.gov, to help you understand tax regulations and how to file your taxes. Seeking advice from tax professionals can also help you navigate the complexities of filing taxes, particularly when dealing with self-employment income.

The advice from a tax professional can help you identify the deductions that are favorable to your tax situation and help you avoid mistakes that could lead to a potential audit. Understanding how taxes work can also help you plan more effectively for the upcoming year.

By coordinating correctly, you can avoid a large bill when tax season approaches. Remember to keep track of all important paperwork, including receipts and bills throughout the year for easy reference at tax time.

In conclusion, setting financial goals allows us to give our lives direction and focus towards achieving a happier and more fulfilling financial life. Preparing for tax time is also necessary to avoid any surprises and stay on top of your financial game.

Whether you take a DIY approach or seek help from a professional, its important to stay organized and disciplined to manage your taxes effectively. With the right mindset and approach, you can create a better and more secure financial future for yourself.

5) Boosting Emergency Fund

It is essential to have an emergency fund in place to face unexpected expenses or financial setbacks that can occur anytime. The recent pandemic has shown how quickly life can take an unexpected turn, and everyone should be prepared for emergencies.

An emergency fund can help provide a sense of security and financial stability during tough times. The recommended amount to save in your emergency fund is between three to six months of expenses.

This cushion can help cover unexpected expenses such as medical bills, car repairs, job loss, or any other unforeseen emergencies that may arise. Building an emergency fund takes time and patience.

It requires dedication and discipline to prioritize saving over spending. Start small by putting aside a portion of your income each paycheck, and overtime, increase the amount as you get better at saving.

Consider setting up automatic savings transfers so that you don’t have to actively think about saving money. In addition to helping you manage emergencies, having an emergency fund can also help you avoid taking on high-interest debt during tough times.

It can provide a safety net that can help you avoid having to dip into credit cards or other loans, which carry high interest rates and can leave you in a cycle of debt.

6) Importance of Retirement Savings

Planning for retirement should be a primary financial goal for everyone, regardless of their age or career stage. Saving for retirement is essential to achieve long-term financial stability and provide for your financial future.

A retirement savings strategy starts with determining what you want your retirement to look like. Do you want to travel, start a new hobby, or simply live comfortably?

This determination will shape your retirement savings plan and help you calculate how much you will need to save. It’s important to start saving early for retirement.

The earlier you start, the more you can benefit from compound interest, which can provide exponential returns on your investment over time. Contributing to a Registered Retirement Savings Plans (RRSP) or 401k given by the employer is a good place to start.

These plans allow you to grow your retirement savings tax-free until withdrawal, and offer a valuable tax deduction on your tax return. Moreover, consistent contributions towards saving for retirement are key to achieving retirement goals.

By following a consistent savings strategy, earnings can accumulate, giving you more abundance in your retirement years. Retirement savings should never be an afterthought – it should be a top priority.

In Conclusion,

Boosting your emergency fund and planning for retirement are both critical components of achieving financial stability. An emergency fund provides a layer of security against the unexpected, and retirement savings provide a path to long-term financial wellbeing.

Neither of these goals can be achieved overnight, but by starting early and being consistent, you can build a solid foundation for a brighter financial future. Take charge of your finances, set realistic goals, and strive towards financial stability for a peaceful and happy tomorrow.

7) Increasing Income

Finding ways to increase your income is key to achieving your financial goals. Whether you are looking to pay off debt, save for a down payment on a home, or build your retirement fund, increasing your income can help you reach those goals faster.

There are two main ways to increase your income, building a successful side hustle or creating passive income streams. Building a successful side hustle requires hard work and determination.

It may involve performing tasks outside the scope of your usual job requirements or starting a business on the side. Regardless of the type of side hustle that you choose, it is crucial to focus on something that you are passionate about.

Building a successful side hustle may take time, so you will need to be patient and persistent. Ensure that your side hustle aligns with your values and schedule.

The rewards can be substantial both financially and professionally, and you may even find that your side hustle becomes your main source of income. Creating passive income streams involves upfront work that can pay off for the long term.

This may include creating an ebook or online course, investing in rental property, or owning dividend-paying stocks. The key to creating passive income streams is to identify something that aligns with your skills and interests and requires an initial investment of time and/or capital.

Once your passive income stream is established, it can be a steady source of income with little to no ongoing effort. Keep in mind that passive income streams may take longer to generate a significant amount of income, but they can be an excellent way to diversify your income portfolio and generate additional revenue.

8) Checking Credit Score

Checking your credit score regularly is crucial to maintaining a solid financial foundation. A good credit score is essential when it comes to obtaining loans like mortgages, car loans, and credit cards with favorable interest rates.

If your credit score is too low, you may be denied credit or may have to pay higher interest rates, which can cost you more in the long run. Improving your credit score takes time, so it’s essential to check and monitor your credit score regularly.

The importance of having a good credit score cannot be overstated. A credit score typically ranges between 300 and 850.

A score of 700 and above is generally considered a good credit score, but some lenders may even require a score of over 800. To keep your credit score in good shape, pay your bills on time, keep your balances low, and don’t close credit accounts unless necessary.

If your credit score is not where you want it to be, there are steps you can take to improve it. Make sure to check your credit report regularly for any errors or inaccuracies.

If you find anything wrong, be sure to dispute it with the credit bureau. Pay down your balances, and make payments on time to avoid missed payments or late fees.

Overall, by monitoring and improving your credit score, you can maintain a solid financial foundation, which can help you achieve your financial goals in the long run. In conclusion,

Increasing your income and maintaining a good credit score are two critical aspects of achieving financial wellbeing and stability.

Creating a side hustle that aligns with your passions and creating passive income streams can help generate additional revenue, while monitoring and improving your credit score can save you money in the long run by keeping interest rates low. These may take time and effort, but it is essential to prioritize your finances and strive towards a brighter financial future.

9) Automating Finances

Automating your finances can simplify your financial life, help you keep track of your priorities, and improve your overall financial wellbeing. When you automate your finances, you can set up automatic payments for bills, savings, and investment accounts, making sure you never miss a payment or a saving.

You don’t have to worry about the added stress of managing your finances, which can relieve some of your financial worries and allow you to focus on achieving your financial goals. The benefits of automating your finances go beyond just simplifying your life.

By automating your bill payments, you’re reducing the risk of missing a payment, avoiding late fees, and avoiding potential harm to your credit score. You can also prioritize your savings by making sure you pay yourself first.

Automating contributions to your retirement savings accounts can help you achieve your long-term financial goals. It is important to check transactions regularly even after setting up automatic payments and savings.

Checking in often can help you keep track of your spending, identify any potential fraudulent activity, and ensure that everything is going according to plan.

10) Double Checking Life Insurance

Life insurance is a vital component of a solid financial plan. It provides financial protection to your loved ones in case of an unfortunate event such as your untimely death, allowing them to maintain their lifestyle and financial stability.

Life insurance is particularly essential if you have dependents who rely on you financially. It can provide a reliable income source and help cover expenses like funeral costs and other end-of-life expenses.

Not having adequate life insurance coverage could be devastating for your family’s financial future, leaving them with a significant financial burden. When choosing the right policy, there are two main types of life insurance to choose from: term life and whole life insurance.

Term life insurance typically provides affordable coverage for a specified term, such as 10, 20 or 30 years and is often seen as a more affordable option. Whole life insurance, on the other hand, offers permanent coverage, builds cash value, and can be seen as a valuable investment when building your long-term financial strategy.

However, whole life premiums may be higher than term life, which may not make it a budget-friendly option for many people. When deciding which policy to choose, consider your budget, your family’s financial needs, and your long-term financial goals.

Seek guidance from a financial professional to help you make a sound decision that is right for your unique situation.

In Conclusion,

Automating your finances and checking transactions regularly helps you simplify your financial life and keeps you on track to meet your financial goals. Ensuring that you have adequate life insurance coverage and choosing the right policy type is crucial to provide financial protection to your loved ones and secure their future.

By prioritizing your financial wellbeing, you can create a brighter, more stable financial future for you and your family.

11) Creating Budget

Creating a budget is a critical component

Popular Posts