This post will guide you through the process of checking in on your annual financial goals, evaluating your performance over the past year, and setting meaningful goals for 2024.

How to Revisit Your Annual Financial Goals

Let’s go over some steps to take as you evaluate your 2023 financial goals.

Review Your Initial Goals
Start by revisiting the financial goals you set for yourself at the beginning of 2023.  These goals could include paying off credit card debt, saving for the down payment on a new home, investing for retirement, or making much needed home improvements.

Assess Your Progress
Then evaluate how much progress you made toward each goal. Did you achieve them, partially achieve them, or fall short?  Be honest with yourself, as this assessment will form the basis for your financial reflections and goal setting for the upcoming year.

Consider Unexpected Financial Events
Consider any unexpected financial events that may have occurred during the year. These could be positive, such as unexpected windfalls or promotions, or negative—for example, unexpected home repairs, medical payments, or car accidents.  These events can have a significant impact on your financial journey and should be factored into your analysis.

Analyze Your Budget
Review your budget for 2023.  Were you able to follow it closely?  Identifying areas where you overspent or underspent can help you make more informed decisions for the future.

Judge Your Financial Performance

Now that we’ve gone over how to revisit what happened in 2023, let’s look at how to judge your financial performance.

Ask Yourself the Tough Questions
To effectively judge your financial performance over the past year, ask yourself these important questions:

• Did I increase my net worth this year?
• Did I reduce my debt, if applicable?
• Did I save and invest according to my financial plan?
• Did I achieve my short-term and long-term financial goals?
• Did I maintain an emergency fund?
• Did I contribute to my retirement accounts?
• Did I manage to stay within my budget and control my spending?
• Did I make progress toward achieving financial independence?

Quantify Your Achievements
Use measurable metrics to quantify your financial achievements. For instance, calculate your net worth, total debt reduction, savings rate, and investment returns. Having concrete numbers will give you a clear picture of how well you performed in 2023.

Reflect on Non-Monetary Achievements
Don’t forget to reflect on non-monetary achievements as well. Did you learn more about personal finance? Did you develop better financial habits? Did you make strides in improving your financial literacy? These non-monetary gains are crucial for long-term financial success.

Setting Goals for 2024

Lastly, set your goals for 2024 so you can start the new year off right.

Identify Your Priorities
Begin by identifying your financial priorities for 2024.  Are there any outstanding goals from 2023 that you want to roll over into the new year?  Additionally, consider new objectives that have come up in 2023 that you would like to pursue next year.

Make SMART Goals
SMART goals are Specific, Measurable, Achievable, Relevant, and Timely.¹  Ensure that your goals for 2024 adhere to these criteria. For example, instead of saying “I want to save more,” you could say, ‘I will save $10,000 for a down payment on a house by December 31, 2024.”

Create a Detailed Plan
Develop a detailed plan for each of your financial goals. Break them down into smaller, actionable steps that you can track throughout the year.  This will help you stay motivated.

Adjust Your Budget
If your financial goals for 2024 require adjustments to your budget,  make those changes early in the new year.  Allocate financial resources strategically to ensure you’re on track to meet your objectives.

Monitor and Adapt
Regularly monitor your progress throughout the year.  Make adjustments as needed, and don’t be discouraged if things do not go according to plan.  Financial journeys rarely follow a straight path, and the ability to be flexible and adapt are the keys to success.

Reflecting on your financial journey in 2023 and setting goals for 2024 is a valuable exercise to your financial well-being.  It allows you to take control of your financial destiny, learn from past experiences, and make informed decisions for the future.

Setting a budget for the holidays is essential to ensure that your celebrations are both enjoyable and financially responsible. Here, we'll explore how to craft a holiday budget that fits your needs, allowing you to revel in the holiday spirit while still watching your wallet.

1. Reflect on Your Values and Priorities

Before diving into budgeting details, take a moment to reflect on your values and priorities for the holiday season. What are the experiences and traditions that matter most to you and your loved ones? Understanding your priorities will serve as the foundation for your holiday budget.

2. Determine Your Total Holiday Budget

Once you've clarified your holiday priorities, establish an overall budget for the season. This amount should encompass all holiday-related expenses, from gifts and travel to decorations and charitable giving.

3. Include a Contingency Fund

Even the most meticulously planned budgets can encounter unexpected expenses. To account for any surprises, set aside a contingency fund within your holiday budget. This safety net will provide peace of mind and flexibility if surprise expenses pop up.

4. Account for Charitable Giving

The holiday season is a time for generosity and giving back to those in need. Consider allocating a meaningful portion of your budget to charitable donations or philanthropic initiatives. Embrace the spirit of the season while giving back to causes that are near and dear to your heart.

5. Monitor and Adjust as Needed

Once your budget is in place, monitor your spending throughout the holiday season. Keep track of expenses, review your budget regularly, and be prepared to make adjustments if necessary. Staying on top of your finances during this festive season will make it much more enjoyable.

Crafting (and sticking to) a budget is a thoughtful and responsible approach to the holiday season. By reflecting on your values, prioritizing spending categories, and adjusting as needed, you can create a holiday experience that is enjoyable and aligned with your financial goals.

1.    Make savings a priority

As a rule of thumb, I recommend that you commit at a minimum 10% of your annual household gross income to savings.  If you can save more than 10% even better.  This sounds great but how should you prioritize this savings?

First, examine your cash reserves.  You should have an initial cash reserve that is equal to the greater of 10% of your household income or 3 months of fixed expenses. If your Initial Cash Reserve is below the necessary amount, then I would prioritize replenishing your initial cash reserve.  If you are a homeowner, you should also have a secondary emergency fund.

Second, target savings for retirement.  Start with allocating 10% of your gross income towards retirement.  If that is not possible, strive to at least contribute up to your company’s matching percentage.  If you can contribute more than 10% even better.  In 2023 the maximum amount of money that can be saved in a 401K plan has been increased to $22,500 per year plus an additional $7,500 if you are over 50 years old.  

Third, review what your financial commitments are for the year.  For most homeowners, their largest financial commitment aside from the monthly mortgage is semi-annual property taxes.  The other big spending item are vacations.  Set aside savings now to make sure you have the funds available for your big spend commitments so you do not have to rely on credit cards.

2.    Prepare an annual cashflow statement.

This exercise will you determine if you are saving or spending more than what you earn.  Knowing this will help you determine your overall financial health.  

a.    Determine your expected annual net household income.  For wage earners this is your net paycheck multiplied by the number of pay periods plus other expected income like bonuses and other compensation.   For retired individuals this would include your monthly social security, pension, and required minimum distributions.  If you are a business owner, this is bit more challenging as you have to estimate what your expected net profit will be for the year. In addition, determine your other sources of income:  bonuses, rental income, stock based employee compensation.

b.    Review your fixed expenses.  Knowing what your fixed expenses are will help you determine how large your initial cash reserves should be.  It will also help to know at a minimum how much money you need to set aside to pay your necessary expenses.  What are fixed expenses?  They are spending activities that occur on a regular basis (monthly, quarterly, semi-annually, or annually).  This includes your mortgage or rent, utilities, insurance, groceries, and fuel.   The monthly amount could be the same or they can vary. Calculate the expected total fixed expenses for the year and divide by 12.  This amount is your average monthly fixed expense and can be used to determine what your initial cash reserve amount should be.

c.    Review your expected discretionary expenses.  These are spending activities that you are not obligated to make but rather you choose to make them.  Vacations, clothing, restaurants, and entertainment are examples of discretionary expenses.  If you need to find ways to reduce expenses so that you can live within your means or wish to save more, the discretionary expenses are the first place to start.

d.    Take your expected annual income and subtract your fixed and discretionary expenses.  If the amount is positive than you have a net surplus.  With a net surplus, the question is where do I save this net surplus and how to put it to the best use to meet your goals.  If it is negative than you are spending more than you make and adjustments will need to be made to your spending by examining your discretionary and fixed expenses.

3.    Utilize budgeting tools and programs to get better organized.  

On-line budgeting programs like Quicken, Mint, and YNAB are readily available and popular tools.  Looking for the most comprehensive and complete cashflow management tool?  Choose Quicken.  Excel is a low tech but highly effective tool in helping you gain a better understanding of your spending.  If you are a client of Attune Financial Planning, you also have a couple of tools at your disposal to help you gain a better understanding of your finances.

a.    eMoney Spending.  Integrated within your eMoney website, you have the ability to track all of your income expenses.  When you link your bank accounts and credit cards with eMoney, all of your transactions are automatically downloaded into your eMoney Spending for your review and analysis.  You also have the ability to create a monthly budget that can help you stay disciplined; especially if you need to reduce your spending.   

b.    First Step Cash Management.  This is a wonderful tool that can help you review your total cashflow activity and determine if you are experiencing a monthly surplus or a shortfall.  

4.    Automate the payment of your bills.  

I recommend that you set up automatic bill pay so that all your bills are paid through one credit card and / or one checking account.  This method ensures all your bills are paid on time and reduces the need to write checks each month.  If you are in a position to pay off your credit cards in full each month, I recommend all bills be paid from a credit card.  This method makes it easier to manage your expenses plus you are able to receive cash rewards or points. The credit card should then be automatically paid in full each month via your designated checking account.

5.    Make it a commitment.

Make it a point to sit down (with your spouse or partner) to reconcile and review your spending regularly.  I recommend that you set aside one day a month to go over your budget.  Preferably choose a quiet time on the weekend and make it a habit.

As I said February is a great time to review your cashflow so that you can make the necessary adjustments to your emergency fund savings, retirement savings, and other savings goals.  Reviewing your cashflow will also help you determine how financially healthy you are.  If you are spending more than you make, now is the time to make changes so that you do not fall into credit card debt.  

Do not hesitate to reach out to me for more information on how I can help you improve your cashflow in 2023.

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This content is developed from sources believed to be providing accurate information and provided by Attune Financial Planning.  It may not be used for the purpose of avoiding any federal tax penalties.  Please consult legal or tax professionals for specific information regarding your individual situation.  The opinions expressed and material provided are for general information only.

Inflation is a naturally occurring phenomenon in a healthy economy as demand for goods & services grow at a faster rate than the supply. However, the sudden rise in inflation today is driven both by unusually high demand and a dramatic decrease in the supply.  With the easing of Covid restrictions, people were suddenly going out and living life again.  Unfortunately, there were not enough workers, products, and fuel to meet this surge in demand.  Russia’s invasion of Ukraine in February added further disruption to oil and natural gas prices.  The result is the extreme surge in the price of goods and services that we are experiencing today.  We all have seen the impact of inflation on everything from coffee, gasoline, groceries, restaurants, hotels, and new & used cars.

Thankfully inflation has shown signs of slowing down as the inflation rate dropped to 8.5% in July.  Economic experts are cautiously optimistic that higher interest rates enacted by the Federal Reserve, easing of supply chain pressures, and reduction in fuel prices will result in further inflation reduction in the months ahead.  However, uncertainties in the oil market, high cost of housing, and wage growth pressures could mean that we will continue to experience higher than normal prices in the months ahead.

The sharp increase in prices has caused me and my family to adjust our spending habits.  Here are a few things we are doing in our household to reduce costs:

We are Eating In not Out

Money spent on food is one of the biggest spending line items on our budget.  In our household, we are eating out (more like ordering to go) at restaurants less often to save money.  We used to eat out quite a bit during weekends but now we are making more of an effort to make breakfast and dinner at home.  In addition, we try not to purchase coffee or other beverages at coffee shops.  Instead, we make coffee at home, fill up our coffee mugs and drink it on the go.  We will also fill up our  water bottles and bring them with us.

We are shopping smartly

We tend to do most of our grocery shopping at Whole Foods or Trader Joe’s.  When we shop for groceries, we are always on the look out for weekly deals and specials.  This has helped reduced our grocery budget especially with meat and fish as these prices have increased significantly this year.  We also try to buy in bulk at Costco when it makes sense. 

When shopping for clothes or shoes, our goal is to never pay full price.  We will shop at an outlet mall or on Amazon versus shopping at a retail mall. 

We are reducing our utility bills

We are mindful of peak electricity usage hours.  Summer has gotten hotter and hotter each year and with that comes the need to run our air conditioner longer and more frequently.  To reduce the cost of electricity, we turn on our air conditioner in the early afternoon to cool the house than leave it off during peak hours.  During peak hours we will use portable electric fans to keep the house cool.  We also will run other appliances like washers, dryers, and dishwashers during non-peak hours.

We have installed solar panels and power walls in our home.  By storing solar power during non-peak electricity usage hours and utilizing solar power during peak electricity hours we have reduced our energy costs pretty significantly.

We are using less water.  In our house, it takes a while for the cold water to turn hot in the kitchen sink and in the shower.  Rather than let that cold water run down the drain, we collect it in a basin and use it to water the plants in our yard.

 We are reducing our streaming services

During the Covid pandemic, we loaded up on many streaming services.  However, with the easing of the pandemic, we don’t have as much time to watch the programs on all of these services.  Because, there are no long-term contracts, we limited our streaming services to the two or three that we use the most and cancelled the rest.  We can always re-sign up if there is programming that we wish to view.

These spending reduction examples that I have outlined will help reduce the sting of inflation and help us save a few thousand dollars a year.  I encourage you to look back at my previous post regarding your 8 Step Summer Financial Checkup and to examine your own household spending habits to see what you can do to lower your spending and increase your savings.

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This content is developed from sources believed to be providing accurate information, and provided by Attune Financial Planning. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information only.

Step 1: Analyze Your Budget

In early 2022, the Bureau of Economic Analysis reported that the personal savings rate is at only 6 percent.¹ An effective way to avoid spending more than you’re earning is to step back and take stock of your monthly and annual budget. And if you don’t have a budget at all, use this time to make one.

Many credit cards or banks will offer categorical breakdowns of your spending, which can be a great way to find out what you’re spending the most money on and if there’s room to cut back. To get the best look at your spending habits, you may want to evaluate your savings and spending record over the past six to 12 months.

Step 2: Seek Out Tax Savings

Do you scramble to pull your paperwork together every March and April? This year, try taking a different approach to tax season by evaluating your tax-saving strategies early. You may want to work with your financial planner or tax professional to create a mock tax return, as this can help you understand your withholding options and tax-saving opportunities such as 401(k) or 403(b) options, IRAs and HSA contributions.

Focus on filing any time-sensitive deductions and brush up on changes in tax laws. Reaching out to your tax professional now could mean you have more time to prepare and strategize together for next year’s returns.

Step 3: Tackle Your Debt

An alarming 38 percent of adults carry credit card debt from month to month.² If you’re guilty of putting off managing your amounting expenses, now’s the time to start planning to pay them off. While most consumers have some amount of good debt on their plate (mortgages, car payments, etc.), it’s the bad debt (credit card debt, student loans, etc.) that you’ll likely want to focus on managing and eliminating.

While you could be tempted to simply pay off what shows up on the bills each month, you may want to create a debt summary to get a better idea of your total debt’s big picture. By creating an annual debt summary, you and your financial advisor can better understand whether you’re gradually working down the amount or falling farther into the hole.

Step 4: Revisit Short and Long-Term Goals

A lot can change in a year - marriage, death, divorce, growing your family and experiencing a major career change. Even seemingly small adjustments, like a job promotion or sending a kid off to college, can have a significant impact on your financial status. That’s why it’s important to regularly review your long-term goals and progress towards them while revisiting and evaluating your shorter-term goals as well. 

Step 5: Evaluate Coverage and Providers

As you’re reviewing your budget and expenses, take the extra time to thoroughly evaluate your current providers and coverage options. This includes your internet, cable and wireless service providers in addition to your insurance coverage options. If you tend to set up auto payments and forget about your monthly bills, this could be an opportune time to revisit what it is you’re actually paying for.  

Step 6: Reassess and Rebalance Your Portfolio

It’s important to visit your portfolio and risk tolerance regularly to help keep it in line with your tolerance, goals and market conditions. While most managed portfolios will be rebalanced automatically, it’s important to take stock of your investments’ big picture. Doing so can help you determine if you need to diversify differently or reassess your risk tolerance.

Step 7: Review Your Retirement Savings

Whether retirement is decades down the line or within the upcoming year, reviewing your retirement savings on an annual basis is a great habit to start. Take the time to assess whether or not you’re maxing out your retirement contribution options and how the savings you’re making today will translate into retirement income later down the line.

Step 8: Assess Your Estate Plan

It’s not fun to plan for the worst-case scenario, but leaving your family with an outdated will, trust or estate plan can lead to some major issues down the line. As you assess your legacy plan annually, make sure you’re accounting for any newly acquired assets (houses, cars, pets, etc.) while checking that your designated beneficiaries are still willing and able to assist in the event of your passing.

While you’re likely daydreaming of book reading, beach-going and backyard barbecuing this summer, don’t forget to do yourself a favor and squeeze in some financial assessment as well. 

The start of the new year means new beginnings and a fresh start.   Here are five financial tips to help you get on the track financially in 2021.

Tip #1: Build Back Your Savings Better

2020 was a tough year financially. You might have had to take money from your savings more than you would have liked to make ends meet.  Make 2021 the year where you build back your savings better.   To help you save more and spend less, ask yourself "will this purchase make my life better?".  If the answer is no or if it will just add clutter to your home then forego the purchase. 

To help you save better, start small by doing things such as:

• Eliminating your morning Starbucks Cappuccino and brewing a pot at home instead
• Cooking meals at home rather than going out to dinner (or ordering take-out)
• Taking advantage of discount and promotions when purchasing new clothes.  Never pay full price.
• Evaluating your cell phone plan and find out if there is a better bargain.
• Delaying your gratification to purchase something.        Wait a few days and ask yourself if you really need it or just want it because it makes you feel good at the moment.

Take the money you that you would normally spend for these activities and place it in your savings account.  You’ll be surprised at how quickly your balance will grow.  For example, the price of an average specialty drink at Starbucks is around $4.  If instead of buying that daily cup of coffee, you placed the $4 in your savings account, you would have $1,460 at the end of the year!

Tip #2: Establish an Emergency Fund

Creating an Emergency Fund does not sound like fun because you can’t enjoy it.   The money just sits there and you can’t touch it.  However, an Emergency Fund is one of the most important things you can save for.  It provides you with that extra peace of mind knowing that if your car unexpectedly breaks down, you have the money to pay for it and you don’t have to dig yourself into a deeper financial hole by having to pay for that unexpected expense on your credit card.  

 Tip #3: Commit to Reducing Your Debt

Reducing your debt is like losing weight:  it is difficult to do but so satisfying when you accomplish your weight loss goal.   If you have multiple credit cards, which one do you focus on first?  Instead of focusing on the credit card with the highest balance, I suggest that you focus on paying off the credit cards that have the highest interest rate first. Once you’ve paid that credit card off, move on to the card with the next lowest interest rate.  Just like seeing the pounds slowly come off, making small changes can start becoming a positive habit and can make it easier for you to continue with the program.

Another alternative would be to apply for a low interest credit card and consolidate all of your credit card debt into that credit card.  I would be very cautious with this strategy as this could be what got you in trouble in the first place.  There is usually a specific period where you have this low interest on balance transfers.   Once that period expires, the interest rate jumps to the higher rate.  So, if you use this strategy, ask yourself if you can repay the credit card completely before the rate increases.  Also, if you get a consolidation loan and keep making more purchases with credit, you probably won’t succeed in paying down your debt. If you’re having trouble with credit, consider contacting a credit counselor first. 

Tip #4: Understand Where Your Money Goes

Believe it or not, unless you are watching every penny that you make, you don’t consciously spend your money so it’s no surprise that at the end of each month we wonder where all of our money went.  If you track exactly where your money is going, it will give you a greater idea of where your overall financial picture stands and will help you determine what areas you should cut to help trim your debt and increase your savings. Simply understanding where your money is going can help relieve anxiety, which in turn, can start to reduce financial stress.  While Quicken provides you the most robust method of tracking your spending (and is a method I strongly recommend), there are simple on-line apps that can quickly help track your spending.   Mint, YNAB, and EveryDollar are some of the few popular apps on the market.  Of course, there is still the old-fashioned paper and pencil method for those of you who prefer the traditional way of tracking your spending.

Tip #5: Focus on Experiences instead of “Things”

Research shows that people enjoy experiences more than possessions, so this is a great way to make better use of your money. Rather than buying that new pair of shoes or expensive outfit, consider these fun options instead:

• Learn a new language
• Sign up for cooking classes 
• Attend yoga and group exercise classes
• Take an art class at your local community college
• Go on a daylong or weekend a road trip.

While this is still spending money, focusing on experiences can help reduce stress and burnout while providing you with positive experiences.

2020 has been extremely stressful on a personal, professional, and financial level. As we prepare for the upcoming year, use these tips to help reduce your financial anxiety and get you on the right track to build back your finances better in 2021.

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This content is developed from sources believed to be providing accurate information, and provided by Attune Financial Planning. The opinions expressed and material provided are for general information only.

#1: Cover the Essentials

These stimulus checks are designed to help Americans who may be financially struggling due to COVID-19. Whether you’ve been furloughed, forced to reduce hours or otherwise face a financial uphill battle, use this money to cover any immediate, necessary expenses - rent, utilities, groceries, internet and the like.  

Consider this check a one-time, mini emergency fund. Take a look at your bills over the coming weeks and determine how you can best be strategic in utilizing these funds. If you’re currently receiving unemployment payments from the government, remember to account for this income when making your financial strategy as well. And if you’re still finding yourself coming up short, remember to check with companies (power companies, insurers, gyms, cable companies, etc.) regarding any relief efforts or forgiveness policies they may have enacted amidst the global pandemic.

#2: Fill Your Emergency Fund

According to a recent study conducted by the Federal Reserve, four out of 10 adults would have difficulty covering an unexpected $400 expense.² With so many living paycheck to paycheck, this extra bump in funds could be the cushion needed to prepare for such financial obstacles.  

Whether your income remains unaffected by the pandemic or you find yourself with some additional dollars leftover, it’s never a bad idea to tuck some away for a rainy day. If you don’t have an emergency fund, saving any surplus from your stimulus check is a good way to start one.

Ideally, an emergency fund should have three to six months’ salary to help cover unexpected expenses such as job loss, medical bills, home damage, car repairs, etc. 

#3: Address High-Interest Debt

Total non-housing household debt in America sits at $4.2 trillion, as of the end of 2019.³ While some of these debts include lower-interest debts like auto loans or student loans, $930 billion of that amount is attributed to credit card debt.³

If you’re currently facing any amount of high-interest debt, such as credit cards or personal loans, paying this down should be a top financial priority. If your current financial situation allows it, use your stimulus check to make a dent in (or pay off completely) any high-interest debt your family may have.

#4: Support Local Businesses

If you’re able to, it’s important to patronize local shops in your community. This may include ordering food from local restaurants, buying gift cards from your favorite boutique or frequenting your local coffee shop for take-out. Small business owners have been some of the hardest hit during these times, meaning your business could make a big difference in their ability to continue operations. 

Remember, most of these owners don’t have the backing of a larger corporation or franchise. They’re local people experiencing a severe drop in revenue that could jeopardize their position in your community over the coming months.

#5: Donate it

If you find yourself in the fortunate position of feeling financially comfortable during the COVID-19 pandemic, you may want to consider giving to those most affected - medical facilities, food banks, shelters, etc. With these groups stretched thin under normal circumstances, the devastating impact of COVID-19 means assistance is needed now more than ever before.

While the ability to make physical donations (such as clothing, toys, pantry items, etc.) may be limited right now, you can still use your stimulus check to provide crucial monetary relief. 

Search for charity organizations using tools such as Charity Navigator or The Better Business Bureau’s Giving Alliance to find ones that are legitimate and well-aligned with your personal values. 

#6: Fund Your Future Retirement

No matter how far off from retirement you are, putting any excess income into a retirement savings account can be a rewarding move. If you’re able, consider using your stimulus check to pad your IRA or 401(k). With the power of compounding interest, that $1,200 could turn into a couple thousand or more by the time retirement rolls around.

These are unprecedented times, meaning many of us are left wondering what’s the best next move for our stimulus checks. Whatever you choose to do, be intentional with these additional dollars. If you’re unsure of what to do next, get in touch with your financial advisor right away. Together, you can discuss the best plan of action moving forward.

 According a survey conducted by MagnifyMoney[1], Americans took on an average of $1,325 in holiday debt in 2019. Here are a few of their key findings:

• 44% of consumers took on debt this holiday season, and the majority (57%) didn’t plan on doing so. Fifty-two percent of Generation Xers and 50% of millennials added holiday debt, versus just 36% of baby boomers.
• Gen Xers added the most debt — a whopping $2,076 on average. Millennials racked up $1,215, and baby boomers added $606.
• 78% of those with holiday debt won’t be able to pay it off after the Holidays, including 15% who are only making minimum payments.

 Unfortunately, the additional holiday debt burden is in addition to the already high average revolving credit card balance of $6,849 that each American household already has[2].

 If you have difficulty paying off your credit card balance each month and are one of the 44% of people who added additional debt over the Holidays, here are six tips to help you get out of and stay out of debt:

1.  Commit to paying down debt

 Commit to paying down your holiday debt over a specific time frame – the shorter the better as the longer you take, the more interest you will pay. Ideally Holiday debt should be paid off within 3 to 6 months.   You should also avoid paying just the minimum monthly payment as doing so will only add years to your credit card debt.  Make a commitment to also paying down your revolving credit card debt within a specific period of time.  For some it could be one year and for others it could be 2 years or more.  Whatever the time period, make it realistic and achievable.  

2.  Make paying down debt a family affair

This is a good time for you and your spouse to sit down and talk about your spending habits and goals.   Determine how you got into this situation in the first place and figure out what you can do as a family to create positive spending habits so you do not get into this position again.   Agreeing to pay down and staying out of debt is like losing weight:  It cannot work without a firm commitment and discipline from everyone involved.

3.  Pay off higher interest credit cards first

Priority should be placed on paying down the highest interest credit cards first. This would be private label cards like Best Buy, Nordstroms, etc.  Once those are paid off, then focus on the next higher interest credit card and so on.

4.  Cutback on other expenses in order to pay off debt

Because the financial priority will be to pay down debt, you should take a close look at your other household spending and reduce expenses in non-essential spending areas – especially in travel and entertainment:  leisure, dining, travel, clothing until your credit card debt is paid off.   Make a commitment as a household that you will cut back on spending until the goal of paying off both your holiday and revolving credit card debt is accomplished.

5.  Plan Your Spending Wisely

To prevent having to get into future Holiday debt and re-living this cycle over again, you and family should plan ahead for next year’s holiday spending.  Come to an agreement on how much you would like to spend on gifts for next year.  For example, if that amount is $2,000, begin saving $182 per month now so on December 1^st you will have $2,000 saved up for gifts. 

If you know you would like to go on vacation or make a big splurge purchase this year, decide to save up for it now versus paying for it with your credit card.  If you won’t be able to save all of the money for the big-ticket purchase in 12 months, agree to wait until the following year and resist the urge to use your credit cards.  Of course, this will mean looking at your current spending and making the necessary changes to your existing budget. 

6. Use Only One Credit Card 

In order to manage your spending and minimize the possibility of getting into further credit card debt, use only one household credit card and commit to paying off the entire balance each month.  

With proper planning, discipline, and the willingness to delay gratification, you should be able to pay off your credit cards in full each month and not have to incur Holiday debt ever again.

HAVE  MORE QUESTIONS ABOUT HOW TO REDUCE YOUR DEBT?

CONTACT ME TODAY

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This content is developed from sources believed to be providing accurate information, and provided by Attune Financial Planning. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information only.

1. Draft a Monthly Budget

Last year at this time, I talked about setting up a personal budget and I provided tips on how to balance your personal budget.  Without one, it will be difficult to know what financial goals you can achieve because  you do not know with confidence how much money you have each month.   While setting a budget might seem like a common task, many people find it hard to complete this activity each month and stick to it.   A monthly budget is the cornerstone of gaining better control of your finances.

2. Take Control of Your Debt

Do you have revolving credit card debt?   Meaning you do not pay off your balance in full each month and only pay the minimum or some amount greater than that but less than the entire balance.  If so, than this should be one of your primary goals.    Make it a priority to payoff your debt in as short of time as possible.  You can use a credit card payoff calculator from bankrate.com to help you figure this out.   By following Tip #1, you will have an idea of what spending will need to be scaled back in order for you to prioritize your credit card debt.  It is also important to make sure that you do not add any more debt throughout the year.

3. Make an Emergency Fund a Priority

Medical costs, major vehicle repairs, job layoffs, or house maintenance can quickly derail a budget. You should make sure that you have a fund set up specifically to handle these unforeseen expenses, so you don't have to alter your monthly budget to accommodate. A good rule of thumb is to establish an initial cash reserve that will cover  at least 3 months of fixed expenses.

4. Prioritize Retirement Savings

Saving for retirement is something that people do not place a high priority on; especially younger people who have 30 plus year to go before retirement.  However, it is important to save for retirement as early as possible because the more time you have to save the more time your investments have to grow and the better return you will have on your investment. If you are paying down your debt, this goal should be a priority.  However, try to at least contribute up to the amount that your company will match up to or at least 5 %.  If you do not have to tackle much debt, consider contributing at least 10% of your gross income for your retirement.  For 2019, you can actually contribute at much as $19,000 ($25,000 if you are over 50) into your 401K Plan.

5. Save for Non-Retirement Goals

What big things do you have planned for the next 1 to 5 years?  Whether that goal is to go on vacation to Hawaii, buy a new car, or make improvements to your kitchen, now is the time to make really good estimates of what the costs of those goals are and begin saving for them now.  By planning and saving properly, you will avoid having to go into credit card debt to fund these goals.

_{This content is developed from sources believed to be providing accurate information.    The opinions expressed and material provided are for general information only.}

1. Save Some Energy by Turning Off the Air Conditioning

You can experience some beautiful weather in the summer months, and there is no better way utilize the fresh air and warm weather than by turning off the air conditioning unit, opening up the windows and letting the amazing summer air in. Enjoying the fresh air will not only save you on your energy bills, but it will also air out your house after the stuffy winter months and let you take in some fresh air if you are cooped up inside. 

2. Hang Your Laundry Outside to Dry

Speaking of energy bills, you can save even more on your monthly electric or gas bill by skipping the dryer after your laundry and hanging freshly laundered clothing out on the line to dry in the summer air. This is a fantastic way to save some energy while getting the amazing fresh air smell into your clothes.

3. Consider a Cookout

Your stove and oven use a lot of energy when working and even worse they produce a lot of heat that has nowhere else to go but to fill up the rooms in the house. Consider cooking out on the grill especially on hot days so you can keep your house cool while enjoying a fresh air outing with your family. 

4. Stock up on Fresh Fruit and Produce

A wide range of fruits and vegetables will come into season during the summer months that would be expensive to purchase when the season passes and the cool weather comes. Take advantages of the lower prices and stock up on your favorites at the farmer's market. You can freeze or can your favorites to be able to enjoy them when the season is over without the extra cost. 

5. Try Biking or Walking for Transport

Save some gas at the pump and do your part to support the environment by opting to take a bike or walk to work or other areas that are close to your home. You will be able to enjoy the great weather, get some fresh air, fit in your daily exercise and save money all at the same time. If you need to run errands, employ the family to come with you to help while enjoying a group bike ride or walking adventure. 

6. Take Advantage of Free Events

There are many fun activities for you and your family to do in the summer that are free or cost little to attend. Many towns and counties will host festivals, outdoor events, or even weekly gatherings like parties in the park. Not only will you enjoy some free entertainment but you will also be able to meet some of those in your community. On nice days where there might be no events around spend the day having a picnic at one of the local parks, beach, or take the kids to the playground.

Use the beautiful summer weather to help you save on energy and entertainment. Follow the tips above to help put some more money in your savings account while enjoying all the summer weather has to offer.

_{This content is developed from sources believed to be providing accurate information. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information only.}

In the old days, it used to be the responsibility of the bride’s parents to pay for the wedding and reception, but that's no longer the case these days. More and more couples are getting married later in life and deciding to pay for the wedding themselves. Weddings have also become much more expensive.  Parents who are now often already helping their young-adult aged children out with their college educations, have little funds left to contribute to a wedding.

If you and your fiancee need to fund your own wedding, it's important to carefully examine both of your financial situations and set a realistic budget based on your savings. The budget you come up with can also give you a realistic idea of when the best time could be for you to get married.   Let’s explore a few practical ways to save for your big day that will blend into your lifestyle.

Set a Budget

In 2017, the average cost of a wedding in the San Francisco Bay Area was $39,500¹ and in Hawaii which is also a popular wedding destination, the average cost was $44,000¹. Of course, you can set a smaller or larger budget depending on your wishes, but any vendor that works on weddings seems to automatically charge more. The best way to come up with a budget that fits your lifestyle is to figure out how much you and your fiancee can realistically set aside each month. If it’s a combined total of $1,000 per month, great! If it’s $2,000, even better. At the end of two years, saving $2,000 each month, this will leave you with a $48,000 budget for your wedding. If you are paying for all of it yourselves, it’s entirely reasonable to give yourself a year or two to realistically save enough money for your big day.

However, if you are only able to save a small amount each month, you'll need to get honest with yourselves and think about the type of wedding you both really want and can truly afford. It is not a good idea to go into debt to fund your wedding, especially when soon after a wedding often comes other large expenses, such as buying a home, having a child, or purchasing a new car. Once you have a realistic idea of how much money you have to work with, get creative! Find alternative options to the most expensive parts of hosting a wedding. There are many online resources where you can find creative ideas to celebrate a wedding on a budget. 

Cut Back on Extras

All those little extras in life add up fast, so think about cutting back on some additional monthly expenses. Try cutting out meals at expensive restaurants, extra pairs of shoes or electronics, or even your daily coffee house habit. Eliminating a $5 latte each day adds up to $150 per month in savings!

Out of Sight, Out of Mind

Keep careful track of your wedding savings by putting it into a special account that neither of you can touch. If you can schedule that savings to automatically be pulled from both of your paychecks, this will help ensure that the money is actually being saved every month. This is much easier to do than separating it out yourselves, as temptation might be strong to spend it on spur-of-the-moment purchases if it hits your regular account.

With a little patience and discipline, it is possible to afford the wedding celebration of your dreams that you will enjoy and remember always.

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_{The information in this material is not intended as investment, tax, or legal advice.  The opinions expressed and material provided are for general information only.}

List Income and Expenses

To get started, my suggestion would be to examine your bank and credit card statements over the last 3 to 6 months to determine a monthly average.  Your budget data can be tracked by simply using a pad of paper, a pencil, eraser, and a calculator.  You can also use a spreadsheet program like Excel if you are more computer savvy.

A good first step is to figure out exactly how much you make (your income) and how much your bills are (your expenses).  Once you've established your after-tax (take-home) income, it's time to list out all of your expenses. First, list easy-to-determine fixed expenses that do not change from month to month, such your mortgage or rent, insurance, car payment, utilities, childcare, cable/internet, phone, membership dues, etc. From there, move on to expenses you have every month (but that may not be absolutely fixed and can vary). This would include things like dining, clothing, gas and groceries. Finally, you can list out expenses that you have quarterly or yearly, and divide them by twelve to get in the habit of putting money aside for them each month (property tax, vacations, car maintenance, home repairs, etc).  The budget for quarterly and yearly expenses can be placed in a savings account and pulled out when needed.  This has the added advantage of not having to use credit cards to pay for these costs that can add up.

Determine What is Left 

After listing out all that you owe each month versus all the income you make, you should be left with a sum of money that is "free" (If you aren't, you are running a deficit and you must go back to your expenses and determine where you can downsize, spend less, or make changes). From that pool of "free" money, you should set aside a certain percentage for savings, and then decide what you would like to do with rest (vacation fund, "fun money", etc). 

Balance the Checkbook and Revisit

Of course, estimating costs in advance can be tough. You might have a year with higher-than-normal medical costs, or unforeseen home repairs. That's why it is so important to contribute to an Emergency Fund - a savings account for "rainy day" expenses such as these. It's also important to remember that because things do change from month to month, your budget is not something set in stone. Once you get started with your budget, you can determine what works best for you and try out different strategies. For the first year or so that you try out your new budget, you may need to make regular adjustments until you find the best strategy that works for you. 

A budget is not meant to hold you back. Rather, if done correctly, it can help decrease your financial stress and negative spending habits. If you need help setting a personal budget, schedule a meeting with a professional financial planner who can offer objective advice and useful strategies.

_{The information in this material is for educational purposes only and is not intended as investment, tax, or legal advice. The opinions expressed and material provided are for general information, and should not be considered a solicitation of any kind.}