January is the time for New Year’s resolutions. It’s also a good time to make some 2024 financial resolutions. What are some useful steps and information to review in order to set up your 2024 financial outlook?
The first step I always recommend is to make a budget. Sit down and list all of your household income, regular or otherwise, and try to come up with an average of your monthly take-home income. Next, to the best of your ability, try to come up with a monthly average of all your household expenses. The most important thing when determining expenses is to be honest. The only way this exercise will be useful is if you are honest about your expenses. If you say that you have $20 a month in streaming services, but when you sit down and review it, it’s actually closer to $100 a month, the lower amount does no good in determining your expenses.
The most common areas that people underestimate are for entertainment, eating out, gambling, alcohol, and cigarettes. People generally underestimate how much it costs to maintain their home and their vehicle. Going through a budget will give you an idea of where your money is really going, and help you determine what is necessary and what is not. You will be surprised with how much money you can free up.
The second step I would recommend in looking at your finances would be to run a free credit report. Get an idea of what is out there and what you owe. Just as people underestimate some of their expenses, they also underestimate some of their debts. Combined with your budget, sit down and figure out how much a month you are spending to maintain and service your debt. Not surprisingly, people will underestimate this as well. Having a grasp on your total debt is essential to making a plan to deal with it.
A third step I would recommend is to write out your financial goals for 2024. It might be a matter of paying down your credit cards or reducing expenses. You may also want to set goals for savings. If possible, maximize any matching contributions for retirement accounts with your employer. Set up a separate savings account with your bank and try to put away a certain amount per paycheck into that account, not to be touched for anything except the largest emergencies. Financial goals help us to focus and keep us accountable.
If your financial burdens feel impossible to tackle, contact us at 412-414-9366. I would be happy to set up a free consultation to discuss your situation. While I primarily focus on bankruptcy, if there are other options, I would be happy to discuss them with you. When your debt seems immovable, bankruptcy sometimes is the best option. Try to put yourself in the best position for 2024 and going forward.