We're Moving These 4 Budgeting Goals to the Top of Our To-Do List
by Ande Frazier
May 29, 2019 .3 min read
Managing your finances can really feel like a full-time job. Not only are there so many elements to keeping your finances on track but the amount of information you may feel like you need to know, in order to make the best decisions for you and your family, can be overwhelming.
With that, we may find ourselves forgetting about some crucial aspects of our financials that allow us to reach our goals, like a long and fruitful retirement.
To keep everyone on track to meet their long and short-term financial goals, here are four (major) things that should be on your financial to-do list:
1 - Digging Yourself Out of Debt
When it comes to eliminating outstanding debt, you really don’t want to let this sit. The longer your debt sits, the more interest it accrues.
With that in mind, it's crucial that you take a look at your finances, set up a plan, and pay off your debt as efficiently and effectively as possible.
It's best to start with debt you know you can eliminate sooner rather than later. Decide whether if that's your car loan, mortgage, or even your student loans. Keep in mind that paying off these debts might require some serious or not so serious sacrifices but will allow you to dig yourself out of debt and move on with your life.
David Wharram, a personal financial consultant, recently told us how he got out of debt, to read his story, check out: "How I Got Out of Debt".
2 - Emergency Fund
Do you have an emergency fund set up already?
If you don't, if you haven’t set this up yet, make sure to put this at the top of your list. Why? If something unexpected occurs, that is considered out of budget for; an emergency fund ensures that you’re able to pay for the necessary expense.
If you find that you only have $100, $300 or $500 to put toward your emergency fund at the moment, that’s okay! Over time you will build up this pocket of money. It might feel like a reach to start allocating funds here, but if and when something unexpected were to occur, you’ll be happy you have it stowed away.
3- Building Your Budget
One of the very first steps in organizing your finances should be building your budget as knowing where your money is going is a very critical part of reaching your financial goals.
Make a list of every expense that you have each month - rent or mortgage payment, electric bills, credit card bills, etc. Allocate the amount of money that will be needed to pay each of these in full.
To develop a budget, take the following steps:
Make a list of your financial goals, both short- and long-term.
Add up all of your income. Include any dividends, interest, or child support you receive.
Add up all your expenses. This should include rent or mortgage payment, electric bills, credit card bills, etc.
Compare your total income to your overall expenses.
Building a budget should not restrict you to what you spend, but give you the freedom to spend money that you have coming in after you’ve taken care of all the necessary expenses for each month.
Don’t think of creating a budget as putting a limit on what you can do; it should be about providing you the freedom to choose how you can spend your money and what you can invest in!
To help get your finances on track and reach your financial goals, you might want to also consider a financial cleanse. You can use this cleanse to reboot your finances, take stock of what you have and what you no longer need, and see if you can accomplish any short term goals.
Once you’ve built your budget and get the hang of sticking to it each month, you can choose what you’d like to invest.
Do you have disability insurance? Life insurance? Are you contributing to your 401K? If not, don’t be overwhelmed by these; they’re all for your benefit. Your 401K is a contribution now to support yourself in retirement. Life insurance is a positive investment for any woman, no matter your age or marital status.
Take a look at all of the options that your current employer offers and talk to your financial adviser. Don’t put these decisions on the back burner!
With these four elements, you’ll be able to not only clean up your finances but also know and manage goals that act in your best interest. Add these elements to your financial to-do list and create a solid foundation for reaching your long and short-term goals.
Ande has made it her mission to break down the emotional, behavioral and societal barriers that stand between women and strong financial foundations.
She's widely recognized as a driving force in the financial community, having risen to the top of the primarily male-dominated insurance world as the former head of a multi-million-dollar fintech company and a VP at Penn Mutual.
Ande launched myWorth to inspire a financial awakening among women who are eager to take control of their financial journeys. Her first book will be published in October 2019.