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Your Financial Life
By Natalie Saar / Jan 4, 2016

6 Smart New Year’s Resolutions for Your Finances

New Years Financial Resolutions

 

It’s the beginning of the new year, which means it’s the first chance you have to make and stick to your goals and resolutions. Some resolutions may be health-based, job-based, or even financially based, and those pertaining to your finances are the ones we try to help you with. Here are some resolutions that can help set you on the right financial path for 2016.

1. Make a budget and stick to it.

First, you should start off the year by looking at the state of your financial affairs and create a budget for yourself. Begin small to keep things manageable, like committing to only spending a certain amount on groceries a week, or only going out with friends a certain number of times a month to cut back on spending. Make sure that you factor in your bills and other expenses that may be coming up (like student loans, for example) so that you don’t have any surprises. You can even go a step further and plan out your entire financial calendar for 2016.

2. Pay down your debt.

With your budget in-hand, start looking at ways you can pay down your debt. Whether it’s loans, car payments, or credit cards, paying these off can help you free up money that you can save or invest. Even getting rid of a $20 monthly credit card payment will leave you with an extra $240 at the end of the year, not to mention the amount you’ll save in interest fees.

3. Increase your FICO® score.

Paying down your debt is a good way to help your FICO® score, but there are other things you can do to repair it too. If you have bad credit, then consider meeting with a credit counselor who can help you assess your situation and how to better it. If you have good credit, then keep doing what you’ve been doing while you look for even more ways to improve your financial situation. If you’re financially responsible, your score will continue to grow over the years.

4. Generate a savings strategy.

There are many ways to save money, and many different reasons to do so. For example, you may want to start saving for an emergency fund, which should be big enough to cover about three months of expenses. If you have that kind of savings fund in place, then you may want to start thinking about saving to buy a car or a home. Or maybe you want to save to start a business of some kind. No matter what you’re saving for, having a strategy will help you get there.

5. Start thinking about your retirement plans.

The New Year is a good time to reassess your portfolio and your retirement plans. If you’re not sure how much money you’ll need in retirement, you can use a retirement calculator to help you figure it out. From there, decide what kind of retirement planning vehicles you want to take part in. It could be your 401(k) at work, an IRA, or maybe even consider investing some of your earnings in a non-qualified account. No matter how you plan to get to your retirement goal, now is the time to have a plan.

6. Create a long-term financial plan.

You have all of the pieces in place to set up a long-term financial plan. Think about where you want to be financially three years from now, then five years, then ten. By detailing where you want to go, you have a better chance at getting there. Make sure to add things like anticipated major purchases, and where you hope you are with your job.

We wish you a happy, healthy, and prosperous new year! And if you need assistance with establishing your financial future, we can help!

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