MEMPHIS, Tenn. — The new year is almost here, which means the time to make new years resolutions is now. With a possible recession on the horizon, budgeting may be a desired goal, with many hoping to make this is the year of saving.
Vincent Perry with Ameriprise Financial says the sooner you get started, the better off you’ll be in the end. He says the average person can’t afford to cover a $400 unexpected expense.
While you’re making your 2023 financial plan, Perry says the best plan is the one you’ll stick with. He’s been working in the financial industry for over 25 years, and he helps people reach their financial goals through strategic planning.
So whether no mater if you are planning for retirement, getting out of debt, or learning how money works, he says start early. To start, he says you’ll want to understand your “why”.
“It really begins with what’s important to you. What are your goals? What are your values? Why are you saving? Is it family? What do you like to do? And then at that point it’s about developing a plan of action,” Perry said.
Here’s how Perry says you should start planning.
First, he says to create a budget to find out how much money you have coming into your home income. You can find multiple free budget templates online.
Once you’ve created a set budget, Perry says you’ll want to start working on setting up an emergency fund. You’ll want to plan to get 3 to 6 months of monthly expenses saved up.
Next, Perry says to cut out any unnecessary spending. So that means eating out less, canceling unused subscriptions or streaming services, or adjusting your home thermostat to save more.
Once you have a financial plan you’re proud of Perry says the last step is to put it all on paper and place it somewhere you’ll see it often.
The advice differs for people starting in debt. Perry says take care of the debt first, starting with the bill that has the highest interest rate.
More financial advice from Vincent Perry can be found in his book ‘Keeping Up with The Joneses? They're Broke, Too’.