NEW ORLEANS — The new year is right around the corner. This is usually the time where we start thinking about new year's resolutions.
Usually, our mind goes straight to fitness or travel goals, but some financial experts suggest you might want to have money on your mind too.
"It's good to maybe think about creating financial goals for the year. The new year is a great time to look back at last year, and what do you want to improve upon this coming year, it's kind of a great reset point as well," said Gregory Ricks, a financial wealth advisor, with Gregory Ricks and Associates.
Ricks said there are a few things that should be top of mind if you are planning ahead. A good place to start is make a commitment to track your spending. If you are always being mindful of what you are spending and where you are spending it, it can be easier to decide where you need to cut back.
"Make sure you have a budget or spending plan in place. I think a lot of people don't do that. So that might be where it's really important to have a savings plan. Sometimes you don't know if you have margin or room in your budget until you break it down," Ricks said.
He says having a specific goal for building your saving will set you up in the long run, but the key here is to actually follow through. Getting an accountability partner, just like the ones you get when you're trying to stay committed to the gym, can keep on the path to reaching your savings goals.
"Share your goals with somebody and have them check in on, you know," Ricks said. "A lot of business development is done with accounting partners to check on and see if that you're working towards your goal, it could be a friend, it could be a mentor, it could be a coworker, as well."
Another thing you can consider is getting your debt in check. Being aware of your debt-to-income ratio is the first step to determining how you can go about paying those debts off. Ricks advises you follow one of two strategies to get your debt in check.
"A part of that might be a great goal is to pay off debt next year, or get rid of credit card debt, there's two methods, the avalanche approach or the snowball approach avalanche is doing so according to starting paying off the highest interest rate and moving to the lowest interest rate last, or my favorite is the snowball, where you categorize your debt in regard to smallest to largest, and start paying off the smallest and then apply that money to the next. While you're paying minimums along the way," he said.
As you figure out what the best strategy is for you and your family this year, Ricks says above all else get a savings plan.
"Do you have an emergency plan?" he said. "It can be just starting small. It might be and I'll say small it might be if you're not saving anything will save 25-a-month for 50-a-month or even if it's a smaller number."
No matter which of these tips you decide to pick up, Ricks says you have to start somewhere. He said starting small and being realistic is the key to actually staying on track with these financially focused New Year's resolutions.
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