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Financial New Year Resolutions

CFP Employee Benefits Financial Advisor Financial Planning Financial Services Health Benefits January 7, 2019 Author: Deborah Doyle

The beginning of a new year is a very popular time to set goals, make plans and resolutions for improving oneself and quality of life. Your resolution list should especially include a few financial resolutions.

  1. Make Financial Goals: Identifying what your financial goals are is the first step. Consider breaking down the big goal into more attainable milestones. This strategy works and allows for you to identify key markers along the way. It also prevents you from being discouraged by minor road bumps.
  2. Track Expenses and Budget: If you’ve never been able to stick to a budget, the new year is a great opportunity to start tracking your expense and developing a realistic budget. One way to start is by taking care of monthly obligations right after receiving your paycheck. This will allow you to get bills paid prior to indulging yourself in any luxuries.
  3. Boost Retirement Contributions: Get on track with retirement savings by boosting your contribution rates of your employer sponsored plan for the new year. If you don’t have access to an employer sponsored plan, consider opening an Individual Retirement Account (IRA) which have similar tax benefits to 401k’s.
  4. Know (and build) your Credit Score: Do you know your credit score? Your credit score is a huge financial factor that creditors look at to see how healthy your finances are. A good score ranges from 700-749 and excellent are 750 and higher. Building a health credit score can take time, so starting now will get you on track.
  5. Tackle Debt (seriously): Whether it’s credit card debt that has built up over time or student loans that are weighing you down—set a goal to pay back a certain amount this year. Set a goal to payback 20% of your high interest debt this year. This way spreading the big goal over the course of 12 months allows you to start small and helps create a new beneficial habit.
  6. Focus on Physical Health: There is a connection between physical, emotional and financial health. This means that the importance of getting your financial life in order can rely on exercising regularly and engaging in healthy social practices.

We all have our fair share of vices and room for improvement, especially when it comes to money.  While facing your financial resolutions is challenging, creating a solid plan and sticking to it could help reshape your year.

 

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