Before setting your goals for this year, review what you accomplished and what you missed in 2017; Some topics to review our level of expenses, debts, protection, investments, and retirement among others.
Just as our body needs a medical check-up to see how your glucose, blood pressure and cholesterol levels are, our finances also require a thorough review to make them work perfectly all year long.
“If you do not, you will not know with what resources you will have or how to organize to meet your goals this year,” said by the author of the book of personal finance ‘The Financial Sheep’, Sonia Sánchez-Escuer.
The diagnosis of the different aspects of their finances should be set down on paper to be modified throughout the year as many times as necessary.
Make a draft of your 2018 financial goals.
Write down what goals you have for this year, what date you want to meet them and how much money you need to achieve. The goals are short-term (three months to one year), medium-term (one year to three) and long-term (three years and up). “If it is about family goals and objectives, it will be necessary that this list is done as a couple,” Gallardo recommended.
Review the status of your previous goals.
Write down what you left behind last year and what goals you achieved. Write down the reasons or obstacles that prevented you from achieving them or what will make you reach them to apply in future occasions.
Depending on your age, marital status and lifestyle, set your priorities on issues of health, safety, education, transportation, etc.
This year, you may make decisions that change the direction of your life: get married, divorce, be a mother, change jobs, start a business or move. Consider them in the analysis because they will change their level of debt, savings, and spending, Gallardo said.
Is it protected?
Your health, home, and car are three things that you should not forget to protect. If you already have insurance, verify that your coverage is correct, if the amount insured is sufficient, amounts of premiums and deductibles or if it is time to change beneficiaries.
Evaluate the performance of your current investments
To meet your goals, you will need to know how much money you have and how much you should save. Review your investment contracts and consider if other institutions or products give you better returns.
Clear your debts
“Organize all your debts by installments, amounts, instrument and monthly interest rates,” Gallardo recommended. Calculate how much you should reserve monthly to pay your debts.
Take your account statements to see what heavy expenditures you made last year, discover patterns of consumption and avoid them, Sonia Sanchez said. Do not spend more than you earn.
Will it have extra income?
Identify what fixed expenses you will have throughout the year, and with what fixed and extra income you will count. “This will help to know with what money you will count to go on vacation or how to respond to contingencies”.