Top Financial New Year’s Resolutions To Make
As one year draws to a close and another year begins, the new year is a time when many begin to reflect on what they want to accomplish. Many people put personal finances at the top of their list when it comes to new year’s resolutions.
For those who are looking for some ways to boost their financial well-being in the coming year, take a look at these top financial new year’s resolutions to make for 2019.
1. Start seriously saving –
It happens to everyone, many start out strong and save a few hundred dollars then a vacation or emergency pops up and throws them off track. One way to start seriously saving money is to automate savings. There are dozens of apps that automatically transfer small amounts to a savings account without the account owner even noticing. This “set it and forget it,” approach takes all the effort out of saving. Set this up into an account that is not easily accessible such as an online savings account.
2. Set up a retirement account –
Saving for upcoming expenses is important, but saving for the future is vital. Many workplaces offer 401K matches should the employee contribute the minimum amount. Contributing the minimum amount needed to earn the employer match is a great way to boost retirement savings. The best part is that retirement savings for 401K’s reduce taxable income, which can save those who take advantage even more money during tax time.
3. Pay off debt –
This is one goal that will likely be found on everyone’s list. In order to really tackle mountains of debt, many people take on a side hustle. Some people drive for rideshare companies such as Uber or Lyft for some extra cash to pay down debts. There are more opportunities than ever to earn some extra income that can be used to reduce debt. Other options are shopping or delivery services, freelance writing or picking up single shifts from places around town.
Another trick many people use to tackle debt is to start with paying off their smallest debt first and pay the minimum amount on all other loans. They put as much extra money as they can into paying off the smallest debt and then move on to their next smallest debt. This creates a snowball effect, and lots of people have had success with paying down their debt with this method. Eventually, as the larger debts get paid down, many find they have more money available to contribute to their savings.
4. Create a budget –
For folks who don’t have enough time to take on a side gig, creating a budget can help improve most financial situations. There are tons of Smartphone Apps and websites that can help create a budget, but the first step is to account for all income and debts. Every year, each person is entitled to a free copy of their credit report from each of the credit bureaus by visiting https://www.annualcreditreport.com/index.action. Using this as a guide to creating a budget can help determine how much to allocate to debts and how much to allocate to other bills and necessities.
Sticking to a budget can be very difficult. Unexpected expenses always tend to turn up. Cutting costs wherever it is possible will go a long way in helping stick to a budget. Doing small things like meal planning and prepping can reduce the amount of money spent on food and cooking at home saves money that would otherwise be spent on tipping at restaurants. Cutting cable is another great way to save some money, especially with several streaming services available that can provide the same entertainment for a fraction of the cost.
5. Look at your current financial status –
The first step of preparing for next year’s finances is to understand the current financial picture. This is the easiest part of the whole process because it does not involve changing anything. The only goal is to look and get a clear picture of where your money is going.
Start by opening up your main bank accounts and investment portfolios. Look at how your net worth has gone up or down over the course of the year. If you had set goals at the beginning of the year, now is a good time to compare your real results to what you’d hoped for. Did you meet your goals or fall short?
Make sure to open up any small accounts you might have forgotten about. If you have an old checking account you haven’t used in six months, take a look just to be sure nothing is wrong there. You could make a list if you have any financial accounts or cards that you want to close.
6. Eliminate wasteful expenses –
It’s amazing how quickly we stack up our expenses. Gym memberships, TV subscriptions, meal planning subscriptions, and a host of other auto-billing services regularly dip into your bank account and take away your hard-earned money. This is fine if you have the money and enjoy the service. Just don’t let them keep charging you when you stop using whatever you are paying for.
When you haven’t watched TV in three months, cancel it. If your gym membership makes you feel guilty but you never actually go, cancel it for now. Whatever you are paying for and not using, get rid of it.
You can easily shake up an extra $100 per month just by canceling your unused services. This is a fun and easy way to start your year-end financial planning by saving some money.
7. Calculate your taxes ahead of time –
You can start preparing your tax statements at the end of the year. It’s best not to actually do any of the final math or fill out the statements yet because things could change in the last month or two. Instead, you should just look at your income and taxes paid so far to see what you can expect on your tax return.
This will give you advance warning in the unfortunate event that you owe money come tax season. It’s better to realize you are $1,000 short on taxes in December than in March. Ideally, you won’t ever be surprised with a tax bill, but it’s better to discover it early than late.
If you are expecting a healthy tax return, it’s fun to find out about that too. You can account for that money and have a plan way ahead of time. This helps to avoid impulse spending that occurs when a lump sum of unexpected money drops into your account. Consider using your return to pay off debts or get ahead on your retirement fund. These are the simplest ways to fast-forward your path towards financial freedom.
8. Set investment goals –
Investing is one of the great joys of life. As a reward for being patient and putting your money to good use, you are able to grow your net worth until you have financial independence. Good investing rewards you and passes on that reward to future generations. It’s good to set investment goals before the end of the year. This enables you and your family to hit the ground running. Don’t be too conservative with your goals. Think about the most ambitious version of your investment plan and aim for that. It’s ok to fall short on a big goal. Financial planning is the best time to get ambitious because when you do well with money, you have more options in life.
9. Get a start on your future finances –
The best time to plan your financial future is ahead of time. Getting your personal finances under control is one of the most important aspects of mental health and clarity. It’s nearly impossible to be happy without a firm financial foundation. Use the tips in this article to start your year-end financial planning and set yourself up for a great year.
There’s no time like the present to work on improving personal finances. These financial resolutions are powerful building blocks to a more prosperous life. Use the new year as a time to reflect on what you can do to improve your financial situation. By planning and monitoring your spending throughout the year, you can get a handle on your finances and not feel guilty when yet another new year approaches.
If you ever need help with financial planning, setting up a budget, or getting your debt under control, we are only a phone call or mouse-click away. Call us today at 1-866-699-2227 or visit us online at www.advantageccs.org, and we’d be happy to help!