January 1, 2011

New Year’s Greetings - 2011

Welcome to 2011 - the beginning of a new year! For many, the start of a new year is a time for fresh starts, New Year’s "resolutions" (decisions), and setting goals for the year ahead. For others, it’s a much desired close to a tough year – financially and otherwise. For some, maybe it’s a bit of both. Whatever the case may be, we're confident that investing at least some time in managing your finances will pay dividends in the year to come.

Like you, we (the makers of CommonCents) also have to manage our personal finances. While we have decades of experience between us, we are now completing our 4th full calendar year of using CommonCents to make the process that much easier. As we close out the year and prepare for the next, we’re likely using the features of the program to do many of the same things you are (or will be) doing. Following are a few areas in which CommonCents may be particularly useful this time of year, along with some practical tips to make the most of them.

Re-evaluating the Budget:
To set realistic goals for the year ahead, it’s helpful to see how we really spent in the year that is closing. With the "Average Expenses Graph (Envelope)" report, we can run a report for last year (or even last quarter if you're just getting started) to see how much we averaged spending each month in each category. The results may or may not be surprising, but they will certainly be revealing. Armed with this information, we can then plan the adjustments to set (or reset) a realistic budget for the new year.

Practical Tip: Re-evaluating your budget doesn't need to wait until year-end. CommonCents gives you visibility into how much you have to spend at any point in time. If you find yourself consistently going over-budget in a category, this may be a signal that you need to allocate more to that area (and adjust other categories accordingly).

Preparing for Tax Filings:
The turn of the year also marks the approaching need to file our tax returns. This makes early January a good time to get organized, which could include establishing (or reviewing) customized reports that support income, deductions, etc. If all of the closing year’s data is entered into CommonCents, setting up a few customized reports that give us the info we’ll need to complete our taxes can be accomplished in a relatively short amount of time.

Wouldn’t it be great to get that tax refund a few weeks (or months) earlier this year?

Practical Tip: If you itemize your tax deductions, you may find a "charitable giving" report helpful. This can be easily established by customizing the existing "Expense Report" to include the envelope(s) you used to record your charitable contributions.

Setting Financial Goals:
Like many of you, we also set goals for each year and periodically track our progress. In CommonCents, the Goal Manager is a great resource in this regard. Since we already have some ideas for how to adjust our budget for the coming year (based on the Average Expense report mentioned above), why not set a few financial goals and let CommonCents track them? Not only can CommonCents give us a percentage complete for each goal, it can also show us how to make adjustments to meet our goal by our target date. It’s a great way to monitor our progress toward where we want to be at the end of next quarter, next year, or even further out into the future.

Practical Tip: Maybe this is the year to start (or extend) your emergency savings fund. This may begin with a goal to have readily accessible funds in savings to cover one month of living expenses. Once you've achieved this you may decide to build toward having 3-6 months in savings, which provides a good hedge against unforeseen circumstances.

In whatever you do in the coming year, we extend to you our very best. May the year ahead be one that is satisfying, rewarding, and very prosperous in each category of your life.

Warmest regards,

The enDevelopment Team
The makers of CommonCents software

Back to the inSight home page...