According to a survey conducted by Fidelity, last year nearly 40% of Americans resolved to work towards a better financial situation in the New Year. Studies show that those who define their resolutions are more likely to accomplish these goals. Not sure where to start?
Identify financial goals. First identify any financial goals you may have. This could include buying a home, paying down student loans, or establishing an emergency fund. Consider what needs to be done and then create an action plan.
Track your spending. Before committing to a budget, track your spending for a month or so to determine areas in which you may be spending too much. Determine which items are necessary expenses and which are spending leaks.
Check your credit report. Take advantage of free credit reporting services to gain a better idea of where you stand. Make sure everything is accurate and if your score is not where you want it to be, incorporate ways to increase this into your action plan.
Boost retirement contributions. If you’re 30 years out from retirement, saving an extra $1,000 annually could earn you over $110,000 extra for retirement assuming a 7% return on investment. Make sure you are contributing enough to at least get the employer match- it’s free money!
Pay down any debts. Although this may be a lofty goal to become totally debt free within a year, you can make strides to pay down your current debts. This may mean contributing an extra $50 a month to your bill. This can usually be automated so you don’t have to think about it the rest of the year.
Do home maintenance. Save money this year by performing some preventative home maintenance like changing air filters, patching leaks, and having your air and heating system inspected. This will help to save you money throughout the year.
Incorporate these resolutions to get your financial life under control in the New Year. Take this motivation and automate good financial behaviors so it doesn’t get lost in the year-long shuffle.