Have you set your New Year’s resolutions yet? According to a recent study, 31 percent of them are money-related. The top financial resolution was to save more money (39 percent), followed by paying down debt (24.6 percent), improving spending habits (15.1 percent), investing more (11.6 percent) and getting a raise (11.3 percent). Interestingly, men were twice as likely as women to say investing is their top resolution.
Baby Boomers were more concerned with improving their spending habits. This isn’t a surprise, given that they are approaching or in retirement. Millennials were more likely to have saving money as their top goal as they start their careers. Regardless of age or gender, here are resolutions to make 2016 a more prosperous year!
- Evaluate your current finances. Calculate your actual 2015 budget and net worth statement. Based on those numbers, forecast your 2016 budget and net worth statement. Hopefully, everything is going in the right direction!
- Re-evaluate your financial goals. Re-examine and recommit to your financial objectives. Are you on the right track? Do you need to change your goals to be more realistic or make them bigger? Set feedback loops with measurable statistics, so you know how well you are performing. Set a monthly or quarterly meeting with your family to go over the status of your goals.
- Re-evaluate your financial plan. Now that you know where you currently are at and where you want to go, check your “processes” and “systems” on how you will get there. This involves your financial and investing plan.
- Get out of debt. Use the debt-snowball method or high-interest payment method to help you pay down your debt. Click here for more details.
- Invest and save more for retirement. If your employer matches contributions to your 401(k), don’t give up the free money! If you haven’t done so already, start up an individual retirement account (IRA) or max out your current one. Talk to a financial professional if you need help in setting up an investment strategy.
- Set up an emergency savings fund. The amount depends on your profession and needs, but one rule of thumb is to save three-four months’ worth of expenses. You will want to have cushion to help you get back on your feet if you have unexpected expenses or lose your job.
- Automate bill payments! If you are hit with late charges, you are just throwing money away and it can lower your credit score. Set up an auto-pay for your credit cards and other bills so they are paid automatically. You also can receive text or email reminders when bills are due.
- Improve your credit score. Your credit score is one of your most important financial numbers. It takes time to build a good score, but little things such as lowering your credit utilization ratio, making payments on time, keeping your credit history open and keeping a good mix of revolving and fixed credit payments, will help you raise it. Click here for more details.
- Cut costs and look for deals. For things you have to spend money on, look for coupons or daily deal sites to save money. Remember not to buy something just because it is on sale. Avoid impulsive purchases by separating your needs and wants, and being accountable to your spending plan.
- Get a raise or find new sources of income. Work and perform at a higher pay level than your current position. When employers look for people to promote or give pay raises, they can see that you deserve it since you have separated yourself in accomplishments and work ethic. If possible, also look for additional income through consulting, free-lancing, house/baby/dog-sitting or selling items online.
Make it a great and SMART 2016! The year is in your hands!
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