By Daniel Korleski, MBA
The new year provides a perfect opportunity for a fresh start, a chance to reflect on past mistakes, and a path to financial recovery. Whether you’ve accumulated debt from overspending or made less-than-ideal investment choices, it’s never too late to regain control of your financial future.
In this article, I share strategies to help you move past financial setbacks and pave the way for a more stable, confident, and prosperous future.
Learn From Past Mistakes
Begin the process by examining your spending habits, investment strategies, and debt level. Doing this can help you pinpoint the causes of financial challenges. Poor financial health is often caused by things like impulsive spending, lack of financial literacy, and not budgeting consistently.
Once you understand the root causes of prior mistakes, you can learn from them and take these steps to avoid repeating those mistakes in the future.
Create a Plausible Budget
To find areas where you can cut back, start by keeping track of your income and expenses. To keep tabs on your spending patterns, think about using spreadsheets or budgeting apps.
Set aside a percentage of your salary for debt repayment and savings, and budget for necessities like housing, utilities, and groceries. Keep your expenses within reasonable boundaries and refrain from making impulse buys.
A well-crafted budget helps you prioritize your financial goals and make well-informed resource allocation decisions. Don’t forget to review your budget frequently and make any adjustments to account for shifts in your financial circumstances.
Confront Debt Aggressively
Create a debt repayment schedule that gives credit card debt and other high-interest debt priority. Consider using debt management techniques like the debt avalanche or snowball approaches, or combining your debt into a loan with a lower interest rate.
Divide your debt into smaller, more manageable amounts to keep yourself motivated. Celebrate every accomplishment, whether it’s lowering your total debt or paying off a credit card.
Keep reminding yourself that by making steady progress toward debt independence, you’re creating a better future for yourself. Patience and perseverance are key!
Improve Your Financial Literacy
By learning about personal financial topics like debt management, investing, saving, and budgeting, you can make informed decisions about your financial future and steer clear of expensive mistakes.
Consider attending workshops, reading books, or taking online courses to acquire valuable knowledge and skills. As your financial literacy improves, you can track your progress, establish reasonable goals, and make necessary adjustments.
Create an Emergency Fund
An emergency fund is like a safety net to shield you against unforeseen costs like auto repairs, medical bills, or losing your job. Establish a reasonable savings target first, such as three to six months’ worth of living expenses. Then set up automated transfers from your checking account to your savings account to help you save more money.
Invest for Future Growth
To start, learn as much as you can about stocks, bonds, and mutual funds. Keep in mind that investing inherently involves risk, so diversifying your holdings and avoiding snap decisions is crucial.
As your financial circumstances improve, progressively increase your investments. Utilizing a long-term investment strategy like this can increase your wealth and improve your financial future.
Consider consulting with a financial advisor. They can work with you to develop a customized investing strategy that fits your financial objectives and risk tolerance.
Collaborate With a Trusted Advisor
Implementing the strategies above allows you to transform setbacks into stepping stones. Remember, it’s never too late to reset and build a more stable financial future.
At Cobalt Private Wealth, we’re here to support you every step of the way. Our tailored financial planning services are designed to help you work toward financial success. Reach out to me at danielkorleski@cobaltprivatewealth.com or 719-332-3863 to schedule a meeting.
About Dan
Daniel Korleski is the President & CEO for Cobalt Private Wealth, where he helps his clients grow, manage, and protect their wealth so they can work toward a stronger financial future. With over 30 years of experience in the financial services industry, Dan has served as the managing director for Investment Trust Company, chief investment officer for the Wealth Management Group at American National Bank in Denver, and regional investment manager for the Greater Colorado Region of the Private Bank at Wells Fargo, where he oversaw the management of over $2 billion. In 2008, he was appointed by the mayor of Colorado Springs to the City’s Investment Advisory Committee. Dan holds an MBA in investment management from Midwestern State University in Wichita Falls, Texas, a Bachelor of Science in Finance from Florida State University, and is a member of both the CFA Society Colorado and The Financial Planning Association.
Dan loves to give of his time to his community and is currently serving as the Board Chair of Catholic Charities of Central Colorado and oversees the Homebound Ministry at St. Paul Catholic Church. He has also served as Chair of the Board of Trustees of Pikes Peak Hospice Foundation, President of the Broadmoor Rotary Club, and Vice President of the Board for the Pikes Peak Chapter of Trout Unlimited. Dan was born and raised in Spain and is fluent in Spanish. To learn more about Dan, connect with him on LinkedIn.
