Do you have a list of resolutions for the new year? For many, January is the time to evaluate life and make changes. Perhaps you want to get in shape or pursue a new hobby. Maybe you want to improve your relationships, further your education or travel to new destinations.
If you’re like many millennials, your resolutions may include steps to get your financial picture in order. Today’s young adults face unprecedented financial challenges. They struggle with exorbitant student loan debt, high costs of living and a difficult job market.
However, millennials also have opportunities that weren’t available to previous generations. The advancement of technology allows millennials to create flexible side income or to advance their knowledge and education.
The good news is that even simple, modest changes in behavior can have a big impact on your financial stability. Below are a few resolutions you can implement to take back control of your finances in 2018:
Start using a budget.
A budget is the cornerstone of any sound financial plan. The only way to build wealth is to consistently bring in more income than you spend. It’s difficult to do that with any regularity if you don’t know how much you spend or where your money goes. A budget helps provide that transparency.
Start by listing your spending categories, and then divide them by fixed and discretionary expenses. Fixed expenses are those that are mandatory and that don’t change from month to month. Discretionary costs are those that you can easily change, such as dining or entertainment. Set target spending amounts in each category, and track your spending so you can stay within your limits.
If you regularly look at your budget and update it, you should start to develop a more disciplined spending mindset. Use the budget to make purchasing decisions and to keep your spending in check.
Treat savings like a mandatory expense.
Do you find it difficult to save money? After paying for bills, groceries and other activities, there may not be much left for savings. The trick is to pay yourself first and treat your savings contributions like any other mandatory bill.
As you develop your budget, make sure to include savings as a line item in the fixed expenses category. Then set your savings on autopilot and make sure your contributions happen regularly. Over time, you’ll find it easier to save, and you’ll see your balance increase.
Maximize time, your most important asset.
If you’re struggling to manage your finances, you may feel like you don’t have any assets. No matter how challenging your situation is, however, you always have one valuable asset that can generate significant wealth.
That asset is your ability to generate income. If you are young and in the early stages of your career, you still have plenty of time to maximize your knowledge and expertise in your field. Look for ways to gain experience and education to make yourself more valuable. Invest in yourself and your chosen profession. Those investments should pay dividends throughout your career.
Ready to take control of your financial picture? Let’s talk about it. Contact us today at Intelliplan Financial. We can help you analyze your needs and goals, and then develop a strategy. Let’s connect soon and start the conversation.
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