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How to Set Your Personal Finances Right and Survive Inflation


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The start of the new year heralds new resolutions and goal setting ranging from getting in shape to kicking bad habits or even learning a new skill. It is also the ideal time to adopt new financial goals.

Whether it’s paying off debt, buying a new car, or investing and saving more — it’s up to you, and you can achieve it with the right tools, budgeting habits, and good personal finance books. Healthy budgeting starts with good planning and consistent adherence to the routine you establish at the beginning of the year. Here’s how to get your personal finances in order this year.

Related: 4 personal finance tips every business owner should know

1. Set up a rainy day fund on top of your emergency fund

While your rainy day fund may be used differently than an emergency fund, it’s a good idea to establish both. A good rule of thumb for an emergency fund is to save at least three to six months’ worth of living expenses, while rainy day funds are generally somewhere between $500 and $5,000. You can use your rainy day fund for smaller life disruptions such as major car repairs, home appliance repairs or unexpected medical procedures, while an emergency fund should be set aside for emergencies such as job losses or major life disruptors.

Setting up a rainy day fund is one of the first steps to starting your finances on the right foot and will give you a sense of confidence as you move forward with other financial goals. Start by determining how much you need to save and contribute to that fund with each paycheck until you reach your goal. Use a high-yield savings account with no withdrawal fees so you can be prepared for life’s unexpected expenses.

2. Develop a monthly budget

If you’ve never developed a monthly budget before, try using the 50/30/20 rule with your income. This means that 50% of your monthly income should go towards necessary expenses, 30% of your monthly income can go towards needs and the remaining 20% ​​should be saved. If your necessary expenses exceed 50% of your budget, take the 30% allowance for your needs until you can adjust.

If you have larger or more immediate financial goals that you want to address, such as investing, paying off debt, or growing a business, you can develop a more specific monthly budget that will help you stay on track to meet those goals in a timely manner. Analyze your spending over a few months and make notes of your spending habits so you have historical data to work from as you build a budget that works for you. Start with your income and subtract your basic savings and necessary expenses. Then identify your financial priorities and specify how much of your remaining budget should go to these priorities.

Related: A new “conventional wisdom” is needed in personal finance

3. Harness the power of accounting software

Your phone and computer can be equipped with endless apps, software and tools that you can use to start and maintain healthy financial habits. Whether you use a personal finance app on your phone or accounting software in your home office, keeping your financial records in order is one of the first steps to getting on the right track with your finances in the new year.

There are tons of low-cost apps designed to make life easier when keeping track of your finances. Budget and expense tracking apps like Mint, NerdWallet, PocketGuard, and You Need a Budget (YNAB) are free or less than $10 a month and can help build a structure in your life to create a financial plan. follow to achieve your goals. These apps bring your bank and credit card accounts together to track your income and expenses automatically. Plus, they include features for customizing a budget for yourself and helping you stick to it by tracking your progress. This can help you pinpoint areas where you should reduce your spending and where those funds can be redirected instead.

If you’re a freelancer or small business owner, investing in accounting software like QuickBooks, Zoho Books, or NetSuite can make sense. Not only will this make your life easier when tax season rolls around, but it can also save you time and keep you organized. They also help create invoices and receipts for your clients and customers, eliminating the need to seek outside help for these tasks. Accounting software can generate financial reports to help you identify areas of your finances that can be improved and simplify financial data that would otherwise be difficult to decipher without extensive accounting knowledge. The learning curve for accounting software takes effort to become familiar with, but it has the potential to save business owners time and money across industries.

4. Schedule accounting steps in your calendar

Using your calendar for proper bookkeeping is one of the simplest and most effective ways to start the new year on a sound financial footing. Treat your financial calendar as you would your work calendar and make sure you complete the tasks you assign yourself on designated days of the week or month. There are tons of ideas for upping your planning game to keep track of your financial goals throughout the year, but here are a few key tasks to keep in mind.

  • Automate your savings. Save yourself time in your personal life and skip the extra step of manually transferring money to your savings each month by automating savings deposits. This guarantees that your savings grow every month without any extra effort, excuses or forgetfulness on your part. You may occasionally shrug or put off transferring money to savings or investment accounts, but it can become a habit that widens the gap between you and your financial goals.
  • Keep track of bills. Apps like Prism and Mint not only help keep track of when your bills are due, but also help you pay them in one streamlined place. Consider automating payments on these accounts to free up time and avoid late charges.
  • Check your bills. Set reminders to search your bank and credit card statements to find unauthorized transactions or forgotten monthly subscriptions. This also gives you the ability to look for areas where you’re spending more than you’d like, helping you go into the next month with more focus on those purchases.
  • Check your financial goals regularly. Do you remember the financial goals you set over the years? Maybe not. You could forget about this year’s goals by the end of March if you don’t regularly evaluate where you stand against your financial goals and if adjustments are needed to get you there. Set realistic, regular times for yourself — whether every few days, weeks, or months — to make sure you’re following your budget and good bookkeeping. If you’re not on track with your financial plan, what habits or systems can you put in place to help you stay on track?

Related: 5 financial tips for budding entrepreneurs

Getting your finances right for the new year can seem like a daunting task, but it’s a crucial step toward financial freedom. While personal finance apps, accounting software, and effective calendar management don’t guarantee financial success, they are helpful tools that will get you moving in the right direction in 2023. t, but after some trial and error, you can find a system that works best for you.

Shreya Christina
Shreya has been with for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

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