New Year’s is a time when we often make resolutions that we hope will bring about positive changes in our lives. Financial health is an area that many people choose to focus on. Being financially fit helps you feel more confident that your financial situation can meet your current and long-term needs. Here are a few ideas that could help you become financially fit in the upcoming year:
Find Your Starting Point
Calculating your net worth is an easy way to get a baseline of your overall financial fitness.
Net Worth = how much you own – how much you owe
You may have to do some research to fill in this equation accurately. However, it is an important step in defining your current financial situation and before you begin establishing goals.
Track Your Spending
Over the next few weeks, track your expenses so that you can better understand your spending habits. Sort your spending into categories like food, utilities, transportation, and entertainment. This may help you see trends that surprise you and areas where you can cut spending.
Create a Spending Plan
Use your monthly income and the spending that you tracked to make a realistic budget. Don’t be discouraged if you need to make adjustments to your budget along the way for emergencies or unexpected expenses.
Just like physical fitness, financial fitness takes hard work and discipline. Ring in the new year with a strong start and build up your financial fitness.
This article is for general information only and not intended to provide specific advice or recommendations for any individual.