The beginning of the year is a great time to review your budget. Changes in income and expenditures in 2015 make it advisable to take a fresh look at your budget for 2016. Take the following steps towards financial security in 2016:
- Review your monthly expenditures and income. Expenditures and income both change over time. While you should be making adjustments to your budget as these factors change, it is good practice to revisit your budget at the beginning of the new year. Start fresh and list out all your expenditures and income from scratch so that you know how much you can devote to paying off debt and saving in 2016.
Tip: Use an online personal finance manager, such as FinanceWorks, to make it easier to organize and track your spending.
- Be realistic with your goals. Don’t overestimate your income or underestimate your expenditures when putting together your budget for the year. Take your “extra” expenditures into account, such as entertainment and shopping costs. If you are realistic about your spending habits, you will have a much clearer vision of your budget for the year.
- Start building an emergency fund. An emergency fund is a savings account with no withdrawal restrictions that you should leave untouched for emergencies. An emergency fund should help you take care of unexpected expenses such as car repairs, replacing an appliance, or short-term unemployment, without resorting to using a credit card or going into debt. Start building an emergency fund in 2016 so that you’ll have peace of mind in the case of an emergency. Don’t have a savings account? Most banks now offer an easy, convenient online application that allows you to open an account without ever stepping foot inside a bank. To get started click here.
- Pay more than the Minimum. Pay off more than your minimum for your loan and credit card payments whenever possible. Most loan and credit card payments require very low minimum monthly payments, at a rate that could leave you paying off a loan for many more years than you need to be. Don’t let your loans accrue even more interest when you can afford to make higher monthly payments.
- Automate Savings Contributions. Make your saving schedule easy and consistent by making automatic payments into your savings accounts every month. If you work your savings into your budget’s expenditures, you can budget around the monthly savings.
Tip: Use convenient services like Online Banking and Mobile Apps to schedule transfers from your checking to your savings account. Need help setting up a recurring transfer? Give us a call.
Are your finances ready for 2016? Give us a call today for assistance with your financial planning and savings accounts. Pentucket Bank is a local bank with branches in Haverhill, MA, North Andover, MA, Salem, NH and Hampstead, NH. Our full-suite of banking products and services can help you get on track to reach your financial goals.