PERSONAL FINANCE RESOLVE TO BE MONEY WISE IN 2021: SET A BUDGET
MINT
BY JAMES PATRICK
THIS PAGE: PHOTO BY SHUTTERSTOCK.COM
us have had plenty of reflection time to think about our finances since the coronavirus shutdown in March and subsequent slowdown we’re still living under. But have you done anything about it yet? If not, read on. Surprisingly, since the shutdown Americans have seen their savings accounts rise by 10% according to Northwestern Mutual’s 2020 Planning & Progress Study. This is likely attributed to the fact that many are working remotely and do not have the commuting expenses, bills for a deli lunch, and the daily $6 skinny latte while you’re on the go. Not to mention the savings on entertainment and vacation. What vacation, right? But if you’re in this boat, financially speaking, that’s good for you! You’re off to a nice start for 2021 planning. OK, let’s talk New Year’s resolutions. According to an Experian study in 2020, the top three resolutions with a financial element were: 1. Save more 2. Improve my credit score 3. Create a personal budget Interestingly, to get to the top two, you’re much more likely to succeed when you start with number three. That’s why we’re leading with this topic in our 2021 Money Wise series. With the help of modern technology, creating and tracking a household budget is not as daunting as it once was. In recent years, banks and Fintech companies that have created some effective and user-friendly systems. So even if math wasn’t your best subject, you’ll be just fine.
We’re going to provide you with a few tried and true sources to set up an online budgeting tool. Setting up a realistic budget starts with tracking and categorizing your actual expenses. That’s your assignment for two months - track and categorize. The first budget you put in to the system may be off. Just plug in your guesstimate and let’s track for two months and make an adjustment in March. Then you’ll know how much you actually spend on: household, dining out, transportation, travel, entertainment, shopping, etc. and can make budget adjustments based on reality. Most of us have set up online banking and bill payer, which work with these budgeting tools. HOT TIP: To best automate your spending tracking and make your life easier, all expenses, purchases, and bills should be made through you online bill payer, credit card, debit card. Then the systems will categorize for you – it’s a cinch! Try to avoid cash except for very small purchases. And if you’re still one of those writing paper checks, please, let’s toss your checkbook into the fire with the Yule log before New Year’s.
YOUR CURRENT BANK OR CREDIT UNION Start by checking out the online budgeting tools at your bank or credit union. Many larger institutions offer this for free. You want something online that will allow you to: set a budget based on category, track progress in real time, see and pay bills, integrate with your savings, checking, loan and credit card accounts so you can see your entire financial picture at a glance. Some even let you see and monitor your credit score.
SIMPLIFI BY QUICKEN You can see where your money goes with spending trend reports. This web and app-based option lets you create spending watchlists based on payee, categories, or tags. Monitor only what’s important to you. Create comprehensive, category-level, 12-month budgets with customizable budget reporting. Auto-generated spending plans are based on your actual bills and income. Automatically know what’s coming up and how much you have left to spend each month. You can track your savings account balances and set up savings goals for short-term or long-term planning and easily track your progress. Use your existing savings account—there’s no new account setup and you move funds when you want to. ($2.99 per month. https://get.simplifimoney.com/) No matter the online budgeting tool you choose, we salute you for starting out 2021 by creating a personal budget. It’s the foundation of your financial success. In our 2021 Money Wise Personal Finance series of feature articles, we will be covering important topics with actionable steps you can take to improve your financial well-being. Some upcoming planned features include: Improving Credit Scores, Savings Strategies, Living Debt Free, Smart Spending, and other timely personal finance topics as 2021 unfolds. This information is intended to provide general guidance. We encourage you to consult your financial advisor and tax planner to review your individual situation before making any significant financial decisions. ■
METROSOURCE.COM
DECEMBER 2020/JANUARY 2021
FINANCE
SAY. YOU’RE NOT ALONE. If nothing else, most of
CULTURE
TIME TO RING IN 2021. NOT FAST ENOUGH, YOU
This web and app-based solution allows you to see everything in one place. They bring together everything from balances and bills to your credit score and more. It’s your financial life, in one place that’s easy to understand. It’s fairly simple and free to set up. They connect to almost every US financial institution. In just minutes, you’ll see where your money is going and get ideas on how to stretch it farther. Mint automatically updates and categorizes your information from your bank accounts and credit cards to retirement accounts and investments. Note: It’s free because you’ll get offers from their sponsors. But some can get you a lower rate on a credit card or higher rate on savings - so not completely unwelcome ads. (Free. https://www. mint.com/)
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