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How to Create a Financial Plan for the Year Series

Financial Plan for the Year Series | Money Saving Tips | Saving & Investing | Smart Money

Figuring out your finances can be so overwhelming! Even if you’ve made money-related resolutions this year (like making headway on debt or starting to save for retirement or creating an emergency fund or sticking to a budget)…there’s just so MUCH it’s hard to even know where to begin!

Good news! Getting back on track financially doesn’t have to be so stressful.

I’m excited to share this financial roadmap for the whole year! The best part is, you don’t have to tackle the entire year at once. We take each month and break it all down into doable, bite-sized tasks, so you can get your finances on track each month, without feeling frazzled.

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Each month is simplified into three action items. Just 3 reasonable to-do items that will each make a big impact on your financial situation and your stress level.

We’ll also answer your most important financial questions, like: When do I renegotiate my utilities? What month is the best month for buying a car? Do I need to add some extra wiggle room in my budget for autumn home repairs before winter? What do I do with my tax return?

So join us for a year of financial planning and success! You can begin at any time, so let’s start planning for your year ahead, today.

Financial Plan for the Year Series | Money Saving Tips | Saving & Investing | Smart Money

January: Set Yourself Up for Financial Success!

January is a month of new beginnings and resolutions. It’s the month when we decide to take on new goals and create new positive habits. While there are many goals each of us might set to get our year off to the best possible start, if you’ve decide to tackle your financial goals this year: Congratulations! You can do this!

Action Items for January:

  1. Gather bills and assess where you are right now.
  2. Start to create a budget.
  3. Start a savings account and aim to save $84.

Financial Plan for the Year Series | Money Saving Tips | Saving & Investing | Smart Money

1. Collect & Review Bills

I’ll admit, this first step is no fun—but it’s a step in the right direction, I promise. The first step to starting your financial year off right is to do an assessment of where you are financially. Take a look at all of it: the good, the bad and the ugly. Maybe you’re already moving toward your financial goals…or maybe you’re falling behind. Either way, no need to stress. The point of this action item is to assess your current situation so you can best plan for the year ahead.

Gather ALL your bills together and take a look at what you’re paying. Check to see if there are any mistakes on your bills. Many of us don’t notice when our cable or electricity bill suddenly goes up, especially if they’re set up for automatic withdrawal. Watch for hidden charges, fees or rate increases.

Assess your bills overall. If you can, call to negotiate any changes in interest rates and ask your utility or credit card companies if they can waive any finance charges or annual fees. (Most creditors will waive fees one time per year.) Also, inquire about any promotional deals you’ve seen to see if you can benefit.

Even if this exercise was stressful (and I know it can be very stressful!), you’re a step ahead now that you’ve realistically assessed your financial state. You’re well on your way to a year of financial success, so keep at it!

Financial Plan for the Year Series | Money Saving Tips | Saving & Investing | Smart Money

2. Create Your Budget

If getting a handle on your finances is your goal for January, making a budget is a great way to start the year off on the right foot. Since you’ve already gathered all your bills and paperwork together, getting started should be a piece of cake.

Look at your mortgage and your loans as well as any outstanding debts. How much do you owe creditors and what does your overall financial picture look like?

To get a clear view of everything, write down everything you owe, the amount outstanding, the interest rate, and the due date for each bill or loan. You can download our budget worksheet to help you get started and organized.

This is typically a good time to determine what you can cut out. Are there some monthly expenses you can give up? Do you need to be part of a gym or can you work out at home? Can you give up cable and just take advantage of your Amazon Prime subscription to stream movies or rent from your local library? Can you renegotiate your family’s phone plan? What are some other monthly expenses you might be willing to forgo to get your finances in order?

Financial Plan for the Year Series | Money Saving Tips | Saving & Investing | Smart Money

3. Start to Save

The New Year is also a great time to set up your emergency fund and start contributing. Even if you can’t save $1,000 right away, if you can figure out a way to put away $84 a month, you’ll get you to your goal of a $1,000 by next January!

If $84 seems like too much, just put away what you can to start. Even building up your change jar or setting up your checking to round up debit card purchases and deposit the extra into savings (a service offered by many banks) can help you get to your goal by the end of the year.

Look at your budget and see where you can shave off a few dollars to get you to your mark. You can read this post for more ideas: 10 Ways to Build Your Emergency Fund.

Financial Plan for the Year Series | Money Saving Tips | Saving & Investing | Smart Money

Bonus: Best Major Purchases in January

Following the holidays, many of us aren’t in a position to spend money on major purchases. However, if you were wise and held out, you might be able to use those Christmas gift cards to save on some great post-holiday deals. January is the best time to take advantage of post-holiday clearance deals, especially on Christmas decorations and wrapping paper for next year.

In January, you can find good deals on furniture and electronics, as well as on videogames and books. Retailers overstocked for the holiday season, so anything that didn’t sell now goes on discounted deals to get it out the door before new spring models are released.

Similarly, you can save on snow blowers and winter yard equipment, furnaces, and home supplies most people rushed to purchase at the beginning of the season in October and November.

Watch for deals on winter clothing like coats, boots, gloves and sweaters. They all go on sale in January, as do pajamas and linens. January is a good time to stock up on holiday canned goods such as pumpkin, cranberry sauce and canned gravy. You can also find deals on frozen holiday items such as ice cream, cakes and cookies (and no one will mind or notice when they’re enjoying gingerbread ice cream in February or March)!

Lastly, watch for gift cards or special deals and discounts. Many smaller retailers stock holiday-themed cards or gift sets they have to move out the door after the season is over. Also visit gift card trade-in sites like Cardpool or GiftCard Zen, where you can score deals on gift cards other people didn’t want in their stockings.

January is a month of new beginnings, tackling new opportunities, and getting yourself set up for success throughout the year. Join us for a year of financial success! Look for new posts each month to help you take on your finances step-by-step every month this year. Make it your New Year’s resolution to start the year off right by tackling your finances and making this your best year ever!

Financial Plan for the Year Series | Money Saving Tips | Saving & Investing | Smart Money

 

23 Comments

  1. January 2 at 07:18AM

    I think it’s really important to set some realistic financial goals. Be specific in what you want to achieve this year and keep track of your spending, expenses. I agree with you on starting to save, try an create a monthly savings goal and take a look at your spending and where can you make adjustments to reach your goals.

  2. January 2 at 08:20AM

    Learning to “tell my money where it’s going” has been life changing, and a plan is key to that happening! Saving has not been in my plan up until now, but starting small with $84 sounds perfect. I am a big believer in the needing to start somewhere…things tend to build from there!

  3. January 2 at 09:28AM

    I definitely plan to be creating a budget (and a meal plan) for myself this month. Buying food is my weakness because I hate cooking but it really adds up! I plan to try the envelope method and see if that visual reminder helps.

    • Robin
      January 8 at 11:26PM

      I did the envelope method for my bills. It worked out great.
      Even though I pay most stuff I used envelopes. That way th obey was physically gone.
      When it came time to pay a particular biol I took the envelope to the bank and deposited that amount.
      I was also able to save about $3,000 in one year by putting my savings in a larger envelope.
      It takes discipline but it was well worth the effort
      Good luck

      • Ruth Soukup
        January 9 at 01:17PM

        Way to go Robin! That is such an inspiring story. Thanks for sharing. 🙂

  4. January 2 at 10:28AM

    Ruth, The idea of saving a specific amount is perfect, but how did you pick $84? I know you must have a reason. Another way to cut expenses on TV is to use an antenna to get local channels you can get those at lots of places including Radio Shack and Walmart.

    • Beth
      January 2 at 10:46PM

      1000/12=83 and 1/3. I’m guessing she just rounded up to save $1000 this year.

    • Ruth Soukup
      January 3 at 06:14AM

      Hi Tamara,

      If you save $84 per month by the end of the year you will have a little over $1,000! And somehow $84 doesn’t seem as hard to save as let’s say $100 a month. 🙂

      • January 3 at 09:20AM

        Ahh, I knew you had a reason. I just couldn’t figure it out.

  5. January 3 at 07:14PM

    I love the action steps! Breaking the challenge into managable pieces is a great plan. I can’t wait to see how this series progresses!

  6. Lynne Klassen
    January 4 at 04:44PM

    Hi Ruth,
    For whatever reason, I have never been able to set goals, of any kind. The Living well planner looks great, but daunting. How do you even know where to start.
    Also, is this more for young families? There’s just hubby and me know and life is completely different.

  7. January 7 at 06:46AM

    Thanks, Ruth, for writing this all out. Looking forward to keeping up with your monthly posts on finances.

  8. January 8 at 12:25AM

    Funny you picked $84, mine is $83.33 ;).

  9. January 9 at 01:21PM

    My family started a No Spending Challenge this year! Only buying true necessities and no frivolous purchases! So excited. so far so good! <3

  10. NR
    January 24 at 06:01PM

    Try GoodBudget on your phone and online. I have found it very useful because you add your expense on your phone as you spend. It is like the old money in envelopes system, only on your phone!

  11. February 2 at 09:19PM

    I love the idea of 84 a month!! That’s such an easily attainable goal

  12. Judy Jenkins
    February 8 at 10:05AM

    One of the things I do to save money is have $200.00 a month put into Flexible Spending Account through work. I continue to pay our daycare out of our main account. So depending on if we have an emergency or want a weekend get away…. I submit my reciepts and then get one check back. It also gives us a TINY tax break. It easier if it’s already out of your paycheck than if you get it and then have to give it up I have found.

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