• Sunday, February 25, 2024
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Financial New Year’s resolutions you can keep


Did you make any resolutions concerning your personal finances last January? If so, how did you do? Did you attain your financial goals, or was the year a total financial washout for you? While Dec. 31st is a day to reflect on the year gone by, Jan. 1 is a time to look forward to the New Year, use this opportunity to review your financial scorecard for the past year and make any possible improvements where necessary for the New Year.

The good news about New Year’s resolutions is that you get to make new ones each year. It’s even better if you can keep the good ones from the past year. In this article, Investopedia provides some New Year’s resolutions to help you improve your finances.

Reset your retirement savings

At work, you probably have the opportunity to save for your retirement through a plan sponsored by your employer. If so, consider that most people find it easier to max out their retirement contributions by budgeting to contribute a set amount each month.

Employer plans

If you have access to a plan at work, consider instructing your employer to withhold enough through salary deferrals to ensure that you reach the maximum limit each year.

 Of course, you should save only amounts that you can realistically afford, as contributing more than you can afford may result in having to incur debts to cover everyday expenses. To determine how much you can save each period, incorporate your retirement savings into your regular budget.

Other resolutions

Rebalance your investment portfolio

The previous year was no different than any other year; with some sectors performing better than others. Chances are that the sectors that performed the best last year may not enjoy a repeat performance this year. By rebalancing your portfolio to its original or updated asset allocation, you take steps to lock in gains from the sectors with the best returns, and purchase shares in the sectors that have lagged behind last year’s leaders.

Pay down your credit cards

If you owe money on your credit cards, determine how much you can realistically afford to pay off during the year. For best results, try not to charge additional purchases on those cards while you’re trying to pay down what you owe. If you have high interest credit card balances, consider whether it would be more beneficial to pay off those high interest debts or to add to your savings.

Review your credit report

Review your credit report, and take steps to repair any negative aspects

Review your life insurance and disability insurance needs

As you move through your career, your life and disability insurance need to continue to change. Give some thought as to how much protection you need and compare it to the coverage you currently have through your employer’s benefit package. Consider whether you need more or less life insurance, and whether your needs would be better satisfied by term or permanent life insurance. Also, review your disability insurance coverage to determine whether you have enough coverage.

The bottom line

Be cautious about setting too many or unrealistic financial goals. Otherwise, you may be unable to accomplish any of them. Take this opportunity to restate your financial resolutions simply and clearly for the New Year and rest easy knowing that this is one resolution you can keep. It may be a good idea to maintain a checklist to keep track of how you are doing throughout the year, so that you can make any necessary modifications. Consider meeting with your financial advisor to review the goals and objectives that you have established.

 Culled from Investopedia US, A Division of ValueClick, Inc.