As a new year approaches, there’s no better time to improve your finances than now. If having more financial stability is on your list of resolutions, setting up a plan that incorporates all aspects of your finances should be your top priority. While we all have great aspirations for achieving our goals as we ring in a new year, you should be serious about financial resolutions. While some people choose to tackle their goals alone, most find that enlisting the help of a financial planner is the best way to bring their plan into fruition. In the meantime, there are steps you can take to prepare yourself for a new year with new financial habits. So, what are they?
Important Steps for Financial Resolutions
The most common resolutions set by people each year are to build their retirement, set a household budget, and pay off debt. If you are looking to make changes to your financial habits, there are some fundamentals you should focus on in 2018. Here are the most important things you can do to improve your financial stability as we turn the corner a new year and a new beginning.
- Budget for Your Future Self
Do you work for a company that offers a 401(k) or employee savings plan? If so, you are basically throwing money away if you don’t participate in these programs. Most companies match your contributions. If you don’t take advantage of these benefits, you are giving up free money. Make the changes necessary to take advantage of your employee benefits and set a habit that will set a good financial path for your future. Automatically have 10-15% of your check into your employee savings plan each pay period. Talk to your financial advisor about how paying into this fund even though you have other debts may still be recommended.
- Build or Replenish Your Emergency Fund
Unexpected expenses are inevitable and can pop up when you least expect them. Whether you need to make a necessary improvement to your home or need your car repaired, having an emergency fund can be very beneficial to you and your family. Since most unexpected expenses lead to an increase in debt for those without an emergency fund, you can put an end to credit card debt from emergency expenses. Put away three to six months of money for unexpected expenses. If you don’t come across expenses throughout the year, add to your fund as each year goes by to be prepared in case you come across expensive repairs.
- Pay Down Your Debt
Debt is an unfortunate weight that many people bear throughout life. Most end up with long-term debt that is difficult to get away from. It possible, try to eliminate any credit card debt you have accrued. Pay down car payments and any other loans you have taken out. Your goal should be to only have one source of debt-your mortgage.
- Avoid Impulsive Financial Decisions
Long-term financial gain begins with having your finances in the best working order. While there are many factors that influence what we spend money on and how much we spend, don’t let these factors affect your judgement. It might sound like a great idea to drain your savings for the exciting family vacation, but your future depends on better financial decisions. Trust your instincts when it comes to unnecessary purchases or investments. Talk to your financial advisor about the best way to keep your savings and retirement secure.
Don’t let the New Year be a time of stress and financial worry. Ring in 2018 with a head start on your financial resolutions. When you plan for success, you will be guided in the right direction. Let your resolutions drive you to make smarter financial choices and you will be on the road to improved finances as each new year passes.