Common New Year resolutions include getting healthier or possibly losing weight. In addition to becoming physically and mentally fitter, it is also a good time to focus on becoming stronger financially. This process can begin by taking time to sit down and set some goals to help keep your financial future on track.
Consider these areas to help formulate your financial goals for the year.
Income: What are your sources of income? Is your income sufficient to accomplish the goals you want to achieve? If necessary, consider a second form of employment that you will enjoy to add additional income to your budget to maximize savings and investment opportunities.
Expenses: Review your spending habits. What are your necessities versus your wants? A thorough review of how you are spending your hard earned money may reveal some areas that are derailing your financial goals. Consider creative alternatives to reduce expenses but not enjoyment.
Savings: Is significant debt impairing your ability to save? If so, focus on creating a plan to tackle your debt. If you are able to save, can your budget handle contributing more money to your retirement plan? One of the best things you can do to cement your financial future is to pay yourself well by contributing to savings and eliminating debt.
Insurance*: Review your insurance policies to ensure you have the proper amount of coverage. Consider your home, has it increased in value? Is your vehicle properly covered? Also, review your health insurance. Consider your overall net worth to determine if an umbrella policy makes sense for your situation.
Something to consider while reviewing above is the 50/30/20 budgeting rule. Simply divide your take-home pay into three categories to provide a framework for how that money should be allocated. With this model, half of your money goes toward “needs,” for example rent, utilities or insurance. Thirty percent is allocated toward discretionary spending such as vacation or going out to eat. The final 20 percent should go towards saving.
Reviewing these areas and following this budgeting rule can help you create financial goals that you can work towards achieving over the course of the year. At Univest, we are here to help you achieve those goals. To learn more about how we can help visit us at www.univest.net or call us at 877-723-5571.
Univest Bank and Trust Co. is Member FDIC
*Insurance products offered through Univest Insurance, Inc. are obligations of the issuing insurance companies, not obligations or deposits of or guaranteed by any bank and are not insured by the FDIC or any other agency of the United States.