Whether you’re managing your personal finances or those of a small business, the New Year is a good time to review, make a few simple changes and set a plan. A 2015 survey commissioned by Fifth Third Bank revealed Americans have limited financial knowledge and stability. Of those surveyed, only 55.8% knew what a credit score measures and 60% didn’t have enough savings to survive for at least six months.
Are you doing everything you can to set yourself up for financial success? Start by checking out these five tips:
Have a plan, set some goals
- For your home — before you develop a plan, you should know where you’re going. What are your goals for the short and long term? Retirement is a given, but you’ll need additional plans if you want to purchase a house or car in the next year or two.
- For your business — a clear business plan is key to establishing where you are and how you want to grow. It can also help make better decisions for short-term problems. Back up your plan with financial targets, budgets and forecasts.
Be informed, know where you are
- For your home — why does a credit score matter and how can you improve yours? A credit score is the deciding factor when applying for a loan or insurance and also determines the rate you will pay. Educate yourself on ways to keep your score strong.
- For your business — knowing your financial position is crucial. Stay in tune with your business; monitor its progress. Make sure you know account balance and current sales and stock levels. Run this against the targets in your business plan monthly to stay on track.
Be efficient, talk about it
- For your home — it’s important to review spending and saving habits whether you’re married or single. Set aside time to review your budget, make adjustments and verify access to important documents and accounts.
- For your business — an easy way to find quick savings for your business is to make sure you’re running efficiently. Where can you make changes? Review your bills and discuss ideas with partners or employees.
Create a budget, control your stock
- For your home — budgeting helps ensure you can pay bills on time, set aside money for unexpected emergencies and reach your financial goals. Be honest; when was the last time you looked at your finances and created a budget? Start today.
- For your business — managing stock effectively and only buying what you need will keep working capital available when you need it. Get the right funding for your business. Look into alternative options.
Cash is king, start saving
- For your home — do you dream of starting a business? Open an account and start setting aside money for future goals or unexpected events. Sometimes it’s hard to find extra after paying the bills, but every dollar counts!
- For your business — things can stall quickly without cash to cover your daily costs. Know your basic needs and make sure you don’t go below them. Stay on top of bookkeeping and invoices to keep tax time manageable and money coming in the door.
If you have financial issues, don’t avoid them! Get informed and start making plans for your success.
Courtesy of Integrity Insurance