Family checkbook: January a good time to reflect — and plan
By Kathy Sweedler/University of Illinois Extension
The beginning of a new year is a time for hope and reflection. A time to ask ourselves, "Where am I in my life and where do I want to be in the future?" Our finances can help us achieve goals or hold us back. We can take steps to manage our finances so that our money can help us.
Now is the time to think about the big picture: What are the significant money issues that need to be dealt with in 2014?
You know your life best, and I'm betting that you can list two or three goals that would improve your financial well-being.
When I think about the big picture, here are financial goals that come to my mind:
Secure or increase your income
Are there steps you can take that will increase your job security or raise your income? Perhaps 2014 is the year to emphasize continuing education or to dust off your resume and look for a new or second job. Do you have a skill you could use supplement your income?
Another way to supplement income is to apply for government benefits. At benefits.gov, you can determine if you are eligible for government benefits such as disability, food and health assistance.
Save for retirement
If you know me well, you knew this would be on my list. Whether you are 30 or 50 years old, now is the time to save for retirement. If you have already started to save, can you increase the amount?
Many of us hope to enjoy retirement for decades; this requires starting to save early. Small amounts will add up with time to grow.
For more about how to save for retirement, visit the Plan Well, Retire Well blog at retirewell.illinois.edu. University of Illinois Extension educators blog regularly about saving and investing strategies.
Pay down debt
Do you have debt with an interest rate higher than the rate of return on your savings or investments? Student loans and credit card debt very likely meet this criteria.
Once you have money in savings to cover emergencies, use your dollars to reduce debt. Use the free calculator at PowerPay.org to make a debt reduction plan today.
Is your will up-to-date? Do your insurance policies adequately protect your home and other valuables? Make an appointment with a legal or financial professional to take care of these important matters.
Before you take care of small financial tasks (like cutting coupons or going to two grocery stores to save money), take care of these big (although, not fun or easy) tasks.
Make a plan for other goals
What is it that you want to do that will make your life more satisfying? Perhaps right now it feels more like a dream than a goal.
Write down that dream. Be specific, make it measurable (about how much will it cost?) and set a deadline when you want to achieve it. Now your dream is becoming a goal.
Does your goal look realistic and achievable? How much do you need to save each week or month to achieve it? Where can you "find" (reduce expenses) or earn this money? Don't forget to work toward your dreams in 2014.
Would you like help with your financial goals? Money Mentors, trained volunteers from the UI Extension, can meet with you to help you outline steps, consider alternatives and share educational resources that can help your dreams become realities.
Money Mentors is a free, unbiased and research-based resource available to talk with about your financial situation. To sign up for a Money Mentor go to web.extension.illinois.edu/cfiv/moneymentors/ or call 442-8615.
Kathy Sweedler is a consumer economics educator at the UI Extension. Contact her at 333-7672 or email firstname.lastname@example.org.