14 Dec New Year’s Resolutions: 5 Financial Resolutions You Should Make
The holidays are here, and then comes the new year. What does your year ahead look like? Are your finances in good shape, or do you even know? If you don’t have a plan in place for 2019, maybe it’s time to start thinking about some resolutions.
Make A Budget
Nothing starts without a plan. Your budget is how you plan to use your income throughout the year. Without it, you may not know where your money is going. Worse, you may not have enough to stretch through the year.
Start by tracking your expenditures for a month to see how you normally spend what you make. Fill in the rest of the year by recording fixed expenditures (such as rent, utilities, and other living necessities) and planning for the flexible areas (food, clothing, entertainment, etc.). As you record your expenses, remember to pay yourself first. If you don’t have an emergency fund, put something aside to build one. Don’t forget about retirement savings as well!
Pay Down (or Off!) Your Debt
Once you have made your budget, you will see where you can cut expenses. You may have plenty of plans for the excess you have trimmed, but a truly wise person will still be thinking ahead. The first step you should take is to use what you can from your surplus to pay down any outstanding debt you have.
Too much to know where to begin? Start with whichever is draining your wallet the most. Usually, credit cards have the highest interest rates, and your goal is to get rid of interest first. Paying interest is like paying for nothing, so the more you can get rid of, the more money you will have available to pay for real things.
Save Where You Can
Also, after you have a budget, you will be able to see where your money is going that it doesn’t need to be. Are you paying for memberships that you don’t even use? Now is the time to close those accounts. Do you have bank accounts that are charging you? See if you can move your money to one that is free, or even earns interest. Even your change jar can help you save. There’s no use letting it sit around when it could be earning you income.
Plan for Later
Start looking at what might be coming up in your future. Have you been living in your home for at least ten years? It might be time to start thinking about replacing appliances. Kids in high school? College or weddings might be on the way. Even if you don’t see big expenses in your near future, you never know when that water heater might blow. That’s where your emergency find comes in.
Beyond those expenditures, you must also consider the unthinkable. Do you have enough life insurance, health insurance, home insurance, or auto insurance to help in case of a disaster? This might be a good time to sit down with an agent to see what he thinks is necessary.
Visit a Financial Advisor
Putting your resolutions into place on your own is a great first step. You may be surprised to learn how smart investments, adequate insurance, and reasonable budgets could help you reach your goals faster than you thought possible. What if you could work with a professional to make sure those resolutions bring you the desired results? You could have a teacher and cheerleader, wrapped up in one.
Even if looking ahead at 2019 is daunting, you can face it with more confidence if you prepare early and work with a financial advisor. You might even find your year ahead to be more exciting than you thought.