Very few people have all the money they would like. No matter what your income, though, you can set reasonable goals in order to better your financial position during the coming year.

Three of the most pressing financial issues that face families, especially young families, today are:

  1. Paying down outstanding debt, including student loans
  2. Building up a savings cushion
  3. Tracking expenses, and balancing expenses to income

Manage Your Finances

Developing a budget is an ongoing process, and it involves not only categorizing how much you expect to spend, but also tracking how much you actually spend. Be as realistic as possible, beginning with living expenses and debt payments.

Rent or mortgage payments, utilities, insurance, car payments and groceries form the backbone of your budget. Second-tier “must-pays” student loans, credit card balances and any other extended purchases.

Budget to Save

If you don’t budget for savings, chances are that money gets spent. Living paycheck to paycheck means that you never really get ahead.

Open an IRA account or contribute to a retirement fund through your employer, if you are able.

Put aside a specific amount, no matter how small, from every paycheck for your “rainy day fund.” Aim for 10 percent, but start where you can.

Change your withholding so that more is deducted from your paycheck; at the end of the year, if you receive a tax refund, put the money into savings.

Your goal should be to put aside enough cash to carry you for a period of at least three months.

Watch Your Spending Habits

Be creative about ways to save. Fill your sports bottle with tap water rather than buying plastic bottles. Pack a lunch instead of buying “fast food.” Organize a carpool. Socialize more often at home. Plan a potluck dinner with friends, or schedule a neighborhood game night.

Allow yourself an occasional Starbuck’s coffee, but don’t make it a daily habit. Enjoy a special weekend movie night, but forego the dinner out.

Analyze and Adjust

Track your expenses weekly, and adjust your budget quarterly. You will detect patterns and you can make adjustments. If you’re having difficulty making payments, contact creditors to see if you can adjust interest rates, or otherwise adjust a payment schedule. Negotiating a solution is always better than missing a payment.

It’s challenging to improve your financial situation, but it’s worth it.

If you find yourself in a downward spiral and need some professional advice about bankruptcy or tax problems, contact Clark & Washington for a free consultation. We can help make 2016 a better year for you.