Money 2017: How to Start the Year Off Right

If you haven’t already made yourself a new year’s resolution – don’t worry, I’ve got one for you. Make 2017 a year of better financial footing. All you have to do is kick the year off on the right foot and make some adjustments for better finances. There are a ton of things you can do to get yourself on the right track, but we will focus on a few of the bigger ones in order to make the largest impact.

Reevaluate Goals

The first step in tackling your financial new year’s resolution is reevaluating, resetting, and creating goals. Goals are the finish line of your resolution, but you can’t possibly get where you want to be without knowing the end. Goals also give you something to work towards. They will keep you on track and motivated to reach a better financial foundation. Set both large and small goals. Be care to not shoot for unattainable things though, because they aren’t going to do you any good.

Automate Saving and Bill Pay

The absolute best thing you can do for yourself is to automate as many payments as possible. One of those payments should be to your savings account. Most living expenses and monthly bills offer an autopay option, so take advantage of it. This will help you pay bills on time and never leave you paying a late fee ever again. Additionally, schedule payments or transfers from your checking to savings. It’s a good way to consistently build up your saving with little effort on your end.

Cash Budgets

Another thing you can give a shot is a cash budget. Many people say it’s much easier to lose track of spending when you use plastic. It makes a lot of sense. Paying for things in cash helps you visualize exactly what you have left to spend. It may also deter you from making certain purchases. You can start small and set a cash budget for things like eating out. If you keep cash on you that only can be used for food that week, you’ll be surprised at how much you save by sticking to it!

Bill Due Dates

Another way to balance your finances is to change bill due dates. Depending on your pay periods, it may be easiest to pay half your bills at the beginning of the month and the rest in middle. Right now you may be tight for the first half of the month because all your bills are stacked at one time. Requesting a change in due dates will help you budget better and leave you with more money each paycheck.

Tax Penalties to Avoid

Tax time will be here before we know it! We talk an awful lot about what you need to do and have in order to file successfully. We don’t discuss enough what you should steer clear of. If you are penalized for any reason, you’ll end up owing more money. Take a look at the top four ways in which people accrue penalties. Be careful to avoid these pitfalls come tax season.

Late filing

The cut off for filing a tax return is April 15th and it’s the same date every year. To avoid receiving a late file penalty, file before the 15th or request an extension if absolutely necessary. Tax season can be stressful, but starting early to get everything completed before April 15th will save you some money and frustration.

Nonpayment Penalty

It’s not enough to just file your taxes by the 15th. You also need to pay your taxes by then as well. If you avoid paying what you owe by April 15th, you’ll end up owing a penalty equal to .5 percent of your due taxes. If that still is not unpleasant enough, you can end up owing up to 25 percent of your tax balance for nonpayment.

Math Errors

Most common on pen-and-paper tax returns, math errors can end up costing you. If you have poor math skills and end up paying less than the actually owed amount, the IRS can charge you interest on the remaining balance until it is paid off. Do yourself a favor and double check your math, file electronically, or hire an accountant.

Incorrect Charitable Donation

For non-cash donations, such as clothing or furniture, it’s imperative that you have proper documentation. When it comes to non-cash items that you plan to claim, make sure you have a copy of the itemized receipt. If you do not have proper documentation, you can be penalized during an audit for up to 25 percent.

Financial Tips for Young Adults

It’s never too early to start learning about personal finance. Once out on their own, young adults will be forever managing their own money and trying to make the best choices they can. Unfortunately, most high schools don’t provide money management classes and only finance majors in college will learn the ins and outs of personal finance before graduation. In order to bridge that gap, here are a few tips to get started!

Start Saving…NOW!

The absolute best thing you can do for yourself is start saving early and often. Set up a retirement fund and a separate saving account to house an emergency fund. No matter how well you manage your money, there will always be unexpected costs. If you don’t prepare a safety net, it can be devastating. As for a retirement account, you have time on your side. The early you start, the more money you’ll end up with. It will be extremely gratifying to be financially independent come retirement because of the smart choices you started making in your 20’s.

Set Clear Goals

Distinguish clear goals for yourself. Goals of all types. Short term goals will give excite you and keep you motivated, while long-term goals will be super rewarding. No matter what expectations and goals you set for yourself, make sure they are realistic. There’s nothing more defeating than setting the bar too high and missing.

Practice Self-Control

Money is an easy thing to waste. There are plenty of things to buy, places to go, and experiences to have. All of these things cost money, but luckily you don’t need them all. Practicing self-control will leave you with more money to save, invest, or use towards a planned purchase. There is nothing wrong with spending money on yourself or others, but you need to be smart about it. It’s easy to get carried away and even cut yourself short for necessary expenses.

Pay Attention to Your Money

Keep a careful watch on your bank statements and the amount of money coming and going. Setting up a budget is a great way to keep track of your money and know exactly where it’s going. In keeping track of your cash, you’ll begin to see patterns and know where you can trim the fat. This is especially helpful in anticipation of large purchases. If you want to go away on vacation, it would be helpful to know what areas of your budget are more flexible. Then, with that knowledge, you can move money around to have a wonderful, stress-free vacation.

Build Credit Responsibly

Credit is an essential thing to build if you ever want to buy a house, a car, or take out a business loan. Without established credit, all of life’s big milestones become a little more complicated. If you have poor or nonexistent credit, your interest rates skyrocket, you have to place a much larger down payment, or you don’t get approved at all. You can avoid that by applying for a credit card and using it as a gas card or to pay pills. If you decide to go this route, be extremely careful. Credit can be a slippery slope and credit card debt will make achieving your financial goals much harder.