4 Ways to Set Up Your Personal Finances Right and Tackle Your Financial Goals This Year


Business finances are important, but at the end of the day, you also need to focus on your personal finances as well. Here are a few tips to do it the right way.

The start of the new year ushers in new resolutions and goal setting, ranging from getting in shape to quitting bad habits or even learning a new skill. It’s also the ideal time to take on new financial goals.

These might include paying off debt, purchasing a new car or putting more into investment and savings — it’s up to you, and you can accomplish it with the right tools, budgeting habits and proper bookkeeping for personal finance. Healthy budgeting starts with proper planning and consistently following the routine you establish at the beginning of the year. Here is how to get your personal finances in order this year.

1. Establish a rainy day fund on top of your emergency fund

While your rainy day fund can 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 up at least three to six months’ worth of living expenses, while rainy-day funds are generally anywhere 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 reserved for emergencies such as job losses or major life disruptors.

Establishing a rainy day fund is one of the first steps to starting your finances on the right foot and gives 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 without withdrawal fees so that you’re prepared when unexpected expenses come up in life.

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 wants and the remaining 20% should be saved. If your necessary expenses are over 50% of your budget, take from the 30% allowance for your wants until you can readjust.

If you have bigger or more immediate financial goals you’d like to tackle such as investing, paying off debts or growing a business, you can develop a more specific monthly budget that will keep you on track to reaching those goals in a timely manner. Analyze your expenses for a couple of months and take notes of your spending habits so that 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 deposits and necessary expenses. After that, identify your financial priorities and itemize how much of your remaining budget should go to these priorities.

3. Harness the power of bookkeeping 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’re using a personal finance app on your phone or accounting software in your home office, keeping your financial data organized is one of the first steps to starting on the right path with your finances in the new year.

There are countless low-cost apps that are designed to make life easier when tracking your finances. Budgeting and expense tracking apps like Mint, NerdWallet, PocketGuard and You Need a Budget (YNAB) are free or under $10 a month and can help set a structure in your life to follow a financial plan to meet your goals. These apps pull your bank and credit card accounts together to track your income and expenses automatically. Additionally, they include features for tailoring a budget for yourself and help you stick with it by tracking your progress. This can help you pin down areas where you should decrease your spending and where these funds can be redirected instead.

If you’re a freelancer or small business owner, it might be helpful to invest in accounting software like QuickBooks, Zoho Books or NetSuite. Not only will this make your life easier when tax season rolls around, but it can save you time and keep you organized. They also help with creating 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 recognize areas in your finances that can be improved and simplify financial data that might otherwise be difficult to decipher without comprehensive accounting knowledge. The learning curve for accounting software takes effort to familiarize yourself with, but it has the potential to save business owners time and money across industries.

4. Schedule bookkeeping steps on your calendar

Utilizing your calendar for proper bookkeeping is one of the simplest and most effective ways to start the new year on good financial footing. Treat your financial calendar as you would your work calendar, and make sure you’re accomplishing the tasks that you assign yourself on designated days of the week or month. There are numerous ideas for improving your scheduling game to keep pace with 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 into your savings every month by automating savings deposits. This guarantees your savings will grow every month without any extra effort, excuses or forgetfulness on your part. You might shrug off or procrastinate transferring money into savings or investment accounts on occasion, but it can develop into 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 tabs on when your bills are due but help you pay them in one streamlined place. Consider automating payments on these bills to free up your time and avoid late fees.
  • Review your accounts. Set reminders to comb through your bank and credit card statements to search for unauthorized transactions or forgotten monthly subscriptions. This also gives you the opportunity to look for areas you are spending more than you’d like, which helps you go into the next month with increased mindfulness of those purchases.
  • Regularly check in on your financial goals. Do you remember the financial goals you set in past years? Maybe not. You might forget this year’s goals by the end of March if you don’t regularly evaluate where you’re at in relation to your financial goals and if readjustments are needed to get you there. Set realistic, regular times for yourself — whether it’s every few days, weeks or months — to make sure you’re following your budget and proper bookkeeping. If you’re not on track with your financial plan, what habits or systems can you establish to help you course correct?

Setting up your finances right for the new year can seem like a daunting task, but it’s a critical 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 set you in the right direction for 2023. It’s worth trying out a few of these methods to see what clicks and what doesn’t, but after some trial and error, you can find a system that works best for you.


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