The new year brings you a fresh opportunity to get your finances under control and better secure your future. To realize those goals requires commitment, planning and a willingness to follow through. Here are five financial resolutions you should consider in 2017.
Make a Budget and Stick to It
Make yourself a budget. Start with a simple list of your incomes and expenses. You can hand-write your budget or download a free budgeting tool like Mint.com to organize everything. Adhering to a budget over the course of the year will be the hardest part. Take a few days to gather the information you need, such as your salary information and household expenses to make the most accurate budget you can. You don’t have to rush it. Over time you will continue to refine your budget as your life and your means change. Make sure to keep your budget in an easily accessible place so you are reminded of the financial goals you’ve set and your commitment to them.
Create a Rainy Day Fund
Most experts recommend you save at least three to six months income, and put it aside to cover any unexpected expenses that might occur during the year. This will give you a cushion in case you lose your job or another event impacts your ability to make money.
Save for Retirement
Set aside money for your retirement by contributing to an IRA, 401k, 403b, or even a savings account. Putting at least 10% of your income into retirement accounts is recommended, but if you have to start smaller that’s okay. It’s a good idea to start planning for retirement as early as possible no matter how much you can put in. You can gradually increase your contributions over time as you make more money or get more comfortable budgeting.
Understand Your Investments
Start your new year by taking stock of your investments. Many people do not take the time to figure out what investments they have or how to handle them. Educate yourself about investments and learn about where your money is. From there you can create an investment strategy that will meet your goals. Consider hiring an accountant to help you to understand and diversify your investments.
Pay Down Your Debt
This is the big one. If you owe money, try to pay it off sooner rather than later. Prioritize payments in order of highest to lowest interest rates. Credit card debt will likely have the highest interest rate and should be tackled first. You can also try eliminating small debts to help you build a little confidence. Crossing a debt off the list is a good way to motivate you to pay off other outstanding balances. Small victories can lead to much larger ones.