Tips for a Fresh Financial Start and Achieving Your Savings Goals

Looking to start a new budget or refresh your current one? These tips can help you start off the new year with a sound financial plan so you can reach your savings goals. 

Americans Look to Budgets to Stay On Track

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In an economy where many Americans are feeling the effects of a tense housing market, inflation, and stagnant wages, proper budgeting is more important than ever. 

Why Do Budgets Matter?

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Figuring out the best way to allocate your money to make sure that your necessities are covered is one thing, but what about making room in the budget for savings or fun? With a little focus, you can create a plan for your funds that will make room for everything you want and need.

Account for Every Dollar

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The secret to a great budget? Account for every single dollar. This takes some work, because you’ll need to review every month to make sure you’re not overspending in any areas, but it ultimately will help you know where your money is going.

Figure Out Your Take-Home Pay

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Creating a budget starts with identifying how much money you bring home after taxes. You can look to your paycheck for this information. 

Net Pay: A Starting Point

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Look for the section called “net pay.” This will show you the amount of money that you’ll receive after taxes have been deducted.

List Your Expenses

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Once you’ve identified your net pay, you need to make a comprehensive list of all of your expenses. This includes things like your rent or mortgage payment, utility bills, groceries, car payments, and insurance. 

Don’t Leave Out the Little Things

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Don’t forget to calculate how much you spend on extras like streaming services or subscriptions! These little expenses can add up, so don’t leave them out.

A Place for Every Dollar

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Let’s pretend you have a net income of $4,000 per month, and all of your expenses total $3,000 per month. That means you have $1,000 left in the budget after all of your bills are paid. You need to make sure this money also has a place in the budget as well.

What Are Your Savings Goals?

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Start by setting a savings goal. Some people set aside a percentage of their income for savings. Ten or twenty percent is a good place to start, but you can make this as high or low as you’d like. Others choose a number and try to save a certain amount each month.

Every Little Bit Counts

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Even if you’re only able to save $5 per week, that comes out to $260 per year. Investing as much as you can into saving for incidentals, emergencies, and the future will pay off in the long run.

Planning for Incidentals and Extras

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Next, think about what other things you spend your money on. Do you go out for brunch with friends once a month? Do you go on movie dates with a partner? How often do you buy coffee on the way to work? 

Using Your History to Predict Future Spending

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One way to identify trends is by going through your recent bank statements and adding up how much you’ve spent on certain things over the past few months. That can help you identify how much to budget.

Budgetary Math

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For example, if you’ve spent $20 per week buying coffee, then you may want to budget that in by figuring out how much it equals monthly ($20 per week, times 52 weeks in a year, equals $1,040. Divide that by 12 months, and you have about $87 per month).

How to Stay On Top of Your Budget

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Budgeting for every single dollar will ensure that your coffee runs don’t end up pushing you over the limit of what you actually have to spend. If you’ve budgeted $87 per month for coffee, then you can breathe easily knowing that you can afford that cappuccino every morning.

Budgeting for Groceries

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You can use this same averaging technique to figure out how to budget for groceries. Look at your bank statement to see how much money you’ve spent at grocery stores over the past few months and let that help you decide how much you need to set aside for food shopping. 

When You Don’t Have a History, Look to Estimates

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If you’re new to financial independence, then averaging previous expenses probably won’t work for you. It might be helpful to look at estimates for things like groceries based on the cost of food where you live, your family size, and where you shop. 

Cost of Living Examples

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In New York City, monthly groceries for a single person average a little under $500 per month. Meanwhile, in Arizona, groceries for a single person will run a bit under $300 per month. 

Location, Location, Location

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Your geographic location and cost of living matters when deciding on a budget. The cost of living varies greatly depending on where you live, so make sure you’re familiar with how much things cost in your area. 

Budgeting: An Investment in Your Future

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No matter how much money you make each month, you should consider creating a budget to manage it. Your wallet and your bank account will thank you (and so will your future self)!

23 Steep Taxes Adding to California Residents’ Burden

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California: a place of sunshine, innovation, and, unfortunately, some of the nation’s highest taxes. From LA’s beaches to Silicon Valley’s tech hubs, residents grapple with a maze of state taxes. Here’s a glance at 23 taxes that might surprise both Californians and outsiders. 23 Steep Taxes Adding to California Residents’ Burden

Cash in on Nostalgia: 21 Toys Now Worth a Fortune

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Time to dust off the boxes and find that once-cherished toy from your childhood. For collectors and enthusiasts, they items have become valued objects and they can be worth big bucks – are there any of these in your attic? Cash in on Nostalgia: 21 Toys Now Worth a Fortune

Millennials Don’t Buy These 19 Products Anymore

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Millennials are changing consumer habits, quietly replacing once-staple products and traditions. Often criticized for their disruptive preferences, this generation is reshaping the marketplace with digital expertise, ethical buying, and a taste for the unconventional. Millennials Don’t Buy These 19 Products Anymore

10 Reasons Firearms Are Essential to America’s Fabric

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Americans’ strong attachment to guns is influenced by constitutional rights, historical context, and cultural traditions. This article explores the cultural perspective driving their unwavering support for gun ownership, revealing the key factors shaping this enduring aspect of American life. 10 Reasons Firearms Are Essential to America’s Fabric

California’s 16 New Laws Raise Red Flags for Prospective Residents

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California, celebrated for its beaches, tech prowess, and diversity, is now gaining attention for its recent legislation, prompting some residents to reconsider their residency. Explore the new laws of 2024 and the controversies and migration they’re stirring. California’s 16 New Laws Raise Red Flags for Prospective Residents

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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.