| Financial Planning
Original Version In Spanish: https://www.semana.com/como-manejar-las-finanzas-durante-todo-el-ano/78983/
When it comes to personal finances, bad decisions can have a snowball-like effect. If you start the year missing a payment here and there, you are disorganized with your taxes, or don't have a clear savings goal, you're setting yourself up for a messy financial life.
A new year, new goals, right? It's human nature to want to start a new year with big resolutions to improve everything from your diet to your relationships to your finances. But when it comes to a person's financial agenda , many experts agree that if goals are not specific, they often fall by the wayside.
"Unfortunately, being 'better with money' is a difficult goal to achieve when compared to other resolutions," says Misty Lynch, behavioral financial coach and certified financial planner at Twine. "It's not like losing weight or quitting smoking. Not everyone can see your progress, and people are unlikely to be there to encourage you in the same way ."
There are many standard financial mistakes that people make that can be prevented with just a little effort and forethought. Start the year off on the right foot by avoiding them:
#1. Not having a plan
Luis Rosa, financial planner and owner of his company “Build a Better Financial Future,” says that one of the biggest financial mistakes people make at the beginning of the year is not planning. "People just can't plan in general sometimes," Rosa says. "If you don't have a plan, then you're like a ship without a rudder... that's why it's important to see what goals you want to achieve ." Whether alone or with the help of a financial planner, ask yourself, Do you want to save more money? Pay off a significant amount of loan debt? Buy your first home? Build your emergency fund? Whatever your financial goals are, setting them from the beginning is vital.
#2. Not thinking about your savings strategy
If you are not clear on a savings method yet, there are many ways in which you can start pursuing your savings goal. But first, you should track expenses and classify them into categories from most to least necessary. See which ones you can reduce.
Once you've considered how much money you've spent in the past, what you're willing to cut, and what expenses you'll keep, it's time to set a monthly amount that you'll stick to for your 'miscellaneous' expenses for the month. If you set a monthly base amount in your budget for each item, you will be able to comply with the percentages. Of course, always keeping records. See other ways to save quickly and safely, or learn more about the Kakebo method.
#3. Defering your taxes
There is no harm in starting to plan ahead for your taxes. Gary Schaider, a certified public accountant and manager at Weiss & Company LLP in Glenview, IL, told INC that one way you can be proactive is by getting organized. Keep in mind anything that may affect your tax situation and the deadline dates for each of the taxes. You can see the tax calendar for 2019 here. This is imperative due to new tax laws and the ways in which rates, exemptions, and withholding amounts have changed, according to the approved Financing Law. So, at the end of the year, you may be paying more if you don't prepare beforehand.
For example, if your ID ends in 99 or 00, you will be one of the first groups that will have to declare in August if, as of December 31, 2018, you did not have gross assets greater than $149,202,000. Nor if during the year your gross income, credit card consumption, purchases, or accumulated bank deposits, deposits, or investments didn't exceed $ 46,418,000.
#4. Not paying your debts
Maybe you spent too much on vacation. Or maybe you're fed up with pointless online shopping. That is why it is the perfect time to create a debt payment plan. Start by setting a different goal, such as paying an extra $100,000 per month above your minimum card payment or switching to a different payment option that reduces the principal on a loan faster. These smaller goals will be easier to measure when starting out and will also be easier to achieve. This method of getting out of small debts first and then moving on to larger ones is known as Snowball.
#5. Not reviewing your investments
Some people completely forget their investment portfolios or even forget to put that extra money into production. So, ask yourself frequently, "How is the market? How are your investments performing? Are you in safer things or riskier things?". You should definitely consider this if you have had a major change in your life in the past year. For example, maybe you had a child and don't want to risk too much. "You may want to change your strategy," Rosa says.
#6. Biting off more than you can chew
Although the new year may leave you motivated, be sure not to set lofty goals that will be difficult to achieve. After all, 80% of people fail to keep their New Year's resolutions until the second week of February. "Don't think that all changes will be radical and global in your financial life," says Schaider. "Pick one or two things you can actually accomplish, pat yourself on the back, and move on to the next thing month by month," she says. Remember that financial professionals or online tools and calculators can help you project what your savings and money goals will look like this year, so don't let yourself get deflated.
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