Make Your Financial Resolutions for the New Year

Senior woman checking bills

As the end of the year approaches, many of us will reflect on 2017 with regret for not following through with our resolutions from 2017, especially when it comes to money. Thirty-six percent of  Americans made a money resolution at the beginning of 2017, according to a Fidelity Investments survey, so that’s a lot of regret! But fear not, 2018 gives us all another chance to better our financial situations. Here are 8 resolutions that can help make 2018 a great year.

Identify Your Financial Goals

Before you can start to get your finances in order, you should identify and set goals. Do you want to buy a home? Pay off debt? Put more money toward retirement? These are just some examples of goals you might want to work toward. Take the time to think about what you want to accomplish and craft a few, concise financial goals for 2018.

Make a Budget and Track Your Expenses

By the end of 2017 Americans will rack up more than $60 billion in new credit card debt and owe $1 trillion in credit card debt overall, according to a new Wallet Hub study. If you don’t want to be part of this statistic in 2018, you need to budget. Look at the bills you paid in 2017, make a list of all your ongoing expenses and prioritize them. Food, healthcare and a mortgage are some important expenses that should be at the top of any list. Once you’ve done your assessment, cut out expenses from the bottom up, until the amount of money you make is greater than the cost of your total expenses. Look for potentially bad financial habits that you can fix, like dining out too often or splurging on video games. Now comes the hard part – sticking to your budget. To help with that, keep track of what you spend every month to make sure you’re not overspending. There are many free budget apps, like Mint.com, that will help you see how you’re spending your money and help you maintain your finances.

Review Your Credit Report Regularly

Reviewing your major credit reports on a regular basis will keep you aware of your credit standing and help you spot fraud. Checking your credit report is free once a year, and you can request it on annualcreditreport.com. You should also consider signing up for free credit monitoring. You’ll receive instant notification anytime there is an important change to your credit report.

Pay Bills Right After Receiving Your Paycheck

Getting in the habit of paying your monthly bills before spending on entertainment and luxury is a smart idea. It will give you a better sense of what you can afford and what you can’t each month. It also ensures you don’t have any late payments to credit card companies, which can result in late fees and negatively affect your credit rating. A good way to make sure you pay bills first is to set up automatic monthly payments to companies that come right out of your checking account.

Increase Your Emergency Savings

According to a recently released report from GoBankingRates, 57% of Americans have less than $1,000 in savings. Significantly less have saved money for an emergency fund. It’s a good idea to beef up your savings account in 2018. You should have enough money in the bank to cover at least six months of expenses if you lose your job or there’s an emergency. Try to build a fund with about 12 to 18 months’ take-home income for even greater security. This will not happen overnight. Make it a goal and chip away at it over time.

Contribute to a Roth or Traditional IRA

A smart financial goal is to invest in your future. Opening a Traditional IRA or Roth IRA can help get you started. Both have $5,500 contribution limits in 2018 for those aged 49 and under, with catch-up contributions of $1,000 for those 50 and over. Your financial planner or accountant should be able to tell you whether a Traditional or Roth IRA is better for you. Both offer important tax advantages that can add up to a significant amount money by retirement.

Find a Better Job

Getting your finances in order is important, but it’s also important to consider how much you earn. A better-paying job could have a significant positive impact on your current financial situation, as well as your future. If you are looking to move up or make a bigger salary you should look for a new position. You should also consider moving someplace where you can earn more. A new town or city may also have a lower cost of living.

Read Financial Books

If you want to learn how to cook, you read a book about it. The same holds true for finances. If you are looking for a way to best manage your money, consider learning more about it from experts. Try reading a financial book a month to gain new perspectives and ideas on how you can take care of your finances, how to navigate the complexities of investing and how you can generate more income.

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