The new year often gives us the opportunity to reassess our goals and plans. Many people resolve to join a gym or eat healthier. Another resolution for people is to make a promise to get their finances in order. Often this is a seemingly difficult task to tackle. So, where do you start?
First and foremost, set up a realistic budget. You must base your budget on actual facts and be as thorough as possible. It’s recommended to write down the amount of money you bring in every month as well as everything you spend. Give yourself a little cushion in each category and try to plan for unexpected expenses (e.g., auto repairs, medical bills, etc.). In fact, you may want to add a budget category called “Miscellaneous” to account for any unknown expenses. For assistance creating or maintaining a budget, try BudgetWise® from BancorpSouth. BudgetWise® provides a complete view of all of your finances in one convenient place.
Another great tip to consider is to put together an emergency fund. The best way to start an emergency fund is to open a savings account and make regular deposits. Set-up payments to automatically deposit each paycheck, even if it is a small amount. What you don’t see, you won’t spend! Use this fund only in emergencies. Then, at the end of the year, take this money and invest it in an account that has more earning power and start your emergency fund all over again.
Above all else, you must be consistent with your effort to become more financially stable. You will have ups and downs throughout the year. There are always instances that occur that were not planned, but you should get into the habit of always reevaluating where you are each month and do your best to stick to your game plan.