Many of us are starting off our New Years with resolutions for a better 2019. Eat healthier, drink more water, make more money etc. One of the often forgotten about New Year’s Resolutions is budgeting but this can help us obtain many of our financial goals in 2019. The easiest way to make more money in 2019 is to better understand and control the outflows of money. Budgeting helps us better understand the outflows of funds and reign in the uncontrolled spending. To budget, one must have a plan and a way to budget. I recommend using some type of software to budget. These easy to use software products take much of the brain power out of budgeting and allow us to set up “rules” for our dollars. Many of our clients take advantage of our budgeting techniques. We have Profit First a money management system and our Engage Financial Organizer, a financial system that allows our clients to see every transaction in one place and assign them to a specific budget. If you would like to know more about our programs, please call or email me.
One of the most common drains on a budget is money subscription services that we once can’t live without and now never use but keep paying for. Example: Netflix, amazon prime, audible, car wash subscriptions, etc. January 2019 is a great time to do an audit of these services and make sure the household is on one account or eliminating the unused accounts.
Now that we’ve set goals to spend less, we can save more – 401K, Roth IRA, IRA contribution limits have increased. It is also a great time to sit down and work these dollar amounts into your budget. This will allow you to save what is needed for a work optional lifestyle as well as take advantage of the tax deductions. 401K deferrals have increased from $18,500 (individual amount under 50 yrs old) to $19,000. If you get paid bi-weekly, you need to defer $730.76 per paycheck to reach the max by the end of the year. Those that are older than 50 yrs. have an additional catch-up contribution of $6,000, deferral of 961.53 is needed each pay period to max out the 401K by the end of the year. IRA & Roth IRA contributions have also increased from $5,500 to $6,000. To max out an IRA an individual needs to put away $500 a month or $250 bi-weekly. Those over 50 yrs. old can make an additional $1,000 catch up contribution to an IRA or Roth IRA 583.33 monthly or 291.66 bi-weekly.
Cheers to 2019 and starting off fresh for the year! If you have any questions on how to set up a budget, what tools to use, etc. Please let us know and we would be happy to help!
Happy New Year
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