REVEAL Q1 2017 - Page 22

2017 Finances New Year, New Budget By Abigail Soren It’s a new year, a new you – time for resolutions! How many of you made resolutions for your finances? Maybe you have some broad goals like saving more or paying off debt. Have you thought about how to achieve those goals? Make sure your goals are S.M.A.R.T. – Specific, Measurable, Achievable, Realistic, and Timely. Below I’ve outlined some suggestions to make 2017 your most financially savvy year yet following the S.M.A.R.T. guideline: Abigail Soren is a Certified Financial Planner™ and Senior Financial Planner at Redwood Wealth Management, LLC. She assists clients in managing and balancing their investments and financial goals. In her spare time, Abigail volunteers for the Atlanta Humane Society and enjoys taking her Pomeranian, Jack, on long walks around the city. You’ll often find them on a Starbucks patio enjoying a good book. Save MOre. Make sure you have an emergency fund – that means 3-6 months’ worth of fixed living expenses set aside just in case poop hits the fan. Set a goal: • Open a savings account separate from your checking account. • Set up an auto-deposit and try to have it funded, say, by the end of 2017, or whatever’s feasible for you. Increase your retirement savings by one percent of your gross income. • If you aren’t contributing to your retirement plan at work at least up to your employer match, start there. • Open a Roth IRA and make an initial deposit (max is $5,500 per year). You can always start a monthly deposit later or contribute when you get bonuses. Spend Less. Actually track what you spent for the last three months. If you are spending more than you bring home each month, you get to cut a few expenses. Here are a few ways: • Schedule a “no spend” weekend once a month. Get creative about how you choose to be a social butterfly for that weekend. • Review your monthly subscriptions and cut the ones you aren’t using anymore. Get (Financially) Organized. Check your Credit Report at to ensure no errors are listed. Reveal | Q1 2017 22 Review your employee benefits: • What are you contributing to your 401K? What is your company match? • Check your beneficiaries on your 401K. Do you have any listed or need to change them due to a major life event? • What insurance are you utilizing? For instance, long term disability is a good idea to sign up for if your employer offers it. If you owe taxes in April, consider adjusting your tax withholding and lower your personal exemptions to withhold more taxes throughout the year. Pay Off Debt. The “28/36 Rule” states that you should spend, at max, 28 percent of your gross monthly income on total housing expenses and no more than 36 percent on total debt (housing, student or car loans, credit cards). If you’re not within this range, think about: • Paying off your highest interest debt first. • Using your bonus to pay down a chunk of debt at a time. • Set aside the additional funds from a promotion or raise to pay off debt. Get The Word Out. Let your significant other/roommate/friend in on your financial goals. You will be much more likely to reach them if you are held accountable – and hey, they may even chip in and help!