You resolve to hit the gym four times a week and cut back on caffeine. You work to advance your career by going after that promotion. Why not commit to increasing your prosperity over the next 12 months? Establishing a plan to maximize your income is just as important as forming a fitness or career plan. So plan to add fiscal goals to your list of New Year’s resolutions.
The beginning of a new year is the perfect time to take stock of your current financial state. It’s time to set goals that will get you to where you want to be financially next December.
Five goals for the new year … and beyond
Everyone’s fiscal needs are different. Tweak this list of financial goals to fit your financial lifestyle.
1. Create a financial cushion through savings
Your car needs a costly repair. Your furnace gives out on the coldest day of the year. Establishing a savings plan will help you handle emergency expenses that pop up. Set a certain amount aside weekly. Ten dollars a week – the price of a movie ticket – will add up fast by the end of the year. (For tips on setting aside savings, see our post on creating an emergency fund.)
2. Establish or repair credit
Your credit rating is a big part of your overall financial health. Resolving to improve your rating now can mean better loan interest rates later.
- To establish credit: Comparison-shop financial institutions for a low-limit credit card with the best rates and terms (e.g., waived late fees, no yearly fee).
- To repair your credit: Karen Guy, Community Engagement Director with Cobalt Credit Union, recommends visiting www.annualcreditreport.com for a free credit report. This year, Experian, Equifax and TransUnion are offering free weekly credit reports until April 2021.Guy advises, “Then, it’s a good idea to talk with a representative at your credit union to find out what products could help you repair your credit,” such as consolidating credit cards under a personal loan with a significantly lower interest rate.
(Learn more about credit ratings in our free e-book, The Building Blocks of Credit.)
3. Review your checking account history weekly
Know your balance, what fees are being charged, and if automatic payments are being paid. Familiarity with your account will also help you detect fraudulent transactions. Simply check your account history online or by calling your financial institution.
4. Examine retirement options
Many employers provide 401K plans. If your company does not, look into Individual Retirement Accounts (IRAs). A meeting with a wealth management advisor will help you explore other retirement saving products.
Break this New Year’s resolution down into several goals and set dates to meet them. For example, meet with a financial advisor by February 1, decide on a retirement vehicle by February 7, and open it by February 15.
5. Track your spending over the year
You increase the odds of following through with your new financial plan when you get a handle on how you spend your money. “A good gauge of this is asking whether you know how much you spend each month on expenses,” says Guy. Don’t know? Tally your monthly expenses, see where you can cut back, and determine what you can allocate to savings.
You’ll find a fillable budget worksheet plus more tips in our free e-book, Financial Basics Made Easy.
You work hard for your money. Make it work just as hard for you by adding fiscal goals to your New Year’s resolutions list. What’s tops your list of financial goals for this year?