New year reminds people to make a financial plan

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MARQUETTE, Mich. (WLUC) - With only a few days left in 2017, people are beginning to think about the upcoming year. And at the beginning of each year, one of the first things people should do is look at their financial situation.

"Budgeting is the first step, if not the most important step in a financial plan. It lays the ground work for everything else that we do," says Christian Verardi, a financial adviser for Edward Jones.

When you start budgeting, there are a few things to consider. "I like to think of the U.S.E.S we can use for cash, and that's an acronym - unexpected expenses and emergencies, short-term savings goals, everyday expenditures, and sources of investment," Verardi says.
The first thing to look at are your everyday expenditures, such as groceries, bills, mortgage or rent, vehicle or insurance payments, and debts; then determine what you have left over for other things.

"One of the very first things after your essentials is to make sure you have an emergency fund," says Patty Barton, a financial adviser for Barton, Knaffla and Associates, Ameriprise Financial Services, Inc.
That fund should have between three and six months of living expenses, in case something unexpected happens such as a furnace going out or a small car accident or medical expense.

Additionally, you should also be saving for the long-term through some sort of investment. "If you have a 401K match, your employer matches your contribution up to 3 percent, that is a defiite priority, because otherwise you're just letting money go out the door because your employee won't match if you're not saving," Barton says.

Overall, you need to figure out your goals and prioritize them. "If you want to have some control and feel empowered about your own financial destiny then that would be the reason why you should start budgeting and start understanding where your dollars are being spent," Barton explains.