Now that personal income tax season is behind us, it’s a good time to take stock of your personal finances. Whether you received a refund or owed money at tax season, you may have some opportunities for change as the year progresses.
Tips to Setting Your Personal Financial Priorities
1. Determine Your Basic Financial Needs
The first key to setting financial priorities is to evaluate what you truly need. For most of us, this group includes food, clothing, shelter and transportation. Generally speaking, when you’re deciding how to budget or save, these items will need to come first.
An important thing to note here is that anything that allows you to make money is generally also a need. For many people, transportation is included here. You could certainly sell your car for a one-time influx of cash, but you might leave yourself without a way to travel to work and earn money in the future, so clearly that would not be a move to prioritize. If you telecommute, on the other hand, reliable internet service might be a requirement to keep income flowing. Be sure that any requirements for your main source of income are counted among your needs.
2. Plan For Your Bills
Once the basics have been covered, it’s time to evaluate your bills. What are you paying beyond your basic food and shelter costs? This would include your utilities and services, as well as any debt payments – whether car loans, credit cards or student loans. Staying current on your bills is another key priority. In fact, if you are behind on your bills, be sure to get current before tackling any of the other priorities listed here.
3. Prepare For Next Year’s Tax Season
If you have self-employment income, a key priority should be paying any estimated taxes you owe, and/or saving money for any potential taxes due next year. Working with your accountant is a good way to ensure your bases are covered here.
Even if you have standard W-2 income from an employer, you should think now about next year’s taxes. Are your withholdings appropriate? Do you understand the 2018 tax changes and their impact on you and your family? If not, this is a good time to work with your accountant – not in March of 2019!
4. Set Personal Priorities
Once your essential needs, bills and taxes are planned for, the final step is to set personal priorities. Perhaps you like to travel; if so, make a specific plan for how you’ll save for the next trip. If your goal is to pay off consumer debt, decide how much extra you will pay on one account each month. If you have a hobby or side business that is important, determine a budget for it.
If you want to know more about financial priorities and how to prepare for next year’s taxes, we can help. Contact us today to schedule your appointment.