Thirty-six percent of Americans made a money resolution at the beginning of 2017, according to a Fidelity Investments survey. With 2018 fast approaching there’s another big opportunity to make a commitment to making better financial decisions. Here are 8 resolutions that can help:
Set Financial Goals
Do you want to buy a home? Pay off debt? Put more money toward retirement? These are just some examples of goals you might want to work toward. To make them a reality, the first thing you must do is identify you want to accomplish in 2018 and beyond.
Create a Budget and Track it
Look at the bills you paid in 2017, make a list of all your ongoing expenses and prioritize them. Cut out expenses from the bottom up, until the amount of money you make is greater than the cost of your total expenses. Look for potentially bad financial habits that you can fix, like dining out too often. To stay on track, keep tabs on what you spend every month to make sure you’re not over spending. There are many free budget apps, like Mint.com, that will help you see how you’re spending your money. To adjust your spending habits, a budget is vital. Without it you won’t understand your cash flow or your spending habits.
Pay Bills First
A good way to make sure you pay your bills first and on time is to set up automatic monthly payments that come right out of your checking account. Getting in the habit of paying your monthly bills before spending on entertainment and luxury will give you a better sense of what you can afford and what you can’t each month. It also ensures you won’t have any late payments to credit card companies, which can result in late fees and may negatively affect your credit rating.
Request and Review Your Credit Report
Checking your credit report is free once a year, and you can make a request for it on annualcreditreport.com. Reviewing your major credit reports on a regular basis can keep you aware of your credit standing and help you spot fraud. You should also consider signing up for free credit monitoring. You’ll receive instant notification anytime there is an important change to your credit report.
Invest in a Roth or Traditional IRA
Opening a Traditional IRA or Roth IRA is a smart way to invest in your future. Both have $5,500 contribution limits in 2018 for those aged 49 and under, with catch-up contributions of $1,000 for those 50 and over. Both offer important tax advantages that can add up to a significant amount money by retirement. Your financial planner or accountant should be able to tell you whether a Traditional or Roth IRA is better for you.
Search for a Better Job
A better-paying job could have a significant positive impact on your current financial situation, as well as your future. If you are looking to move up or make a bigger salary, consider searching for a new position. You should also think about moving to a new town or city. You may find higher paying opportunities and/or a lower cost of living.
Bolster Your Emergency Fund
It’s a good idea to beef up your savings account in 2018. According to a recently released report from GoBankingRates, 57% of Americans have less than $1,000 in savings. Significantly less have saved money for an emergency fund. Try to build a fund to cover at least six months of expenses if you lose your job or there’s an emergency. This will not happen overnight. Make it a goal and chip away at it over time.
Crack Open a Book
Try reading a financial book a month to gain new perspectives and ideas on how you can take care of your finances, how to navigate the complexities of investing, and how you can generate more income. If you want to learn how to cook, you read a book about it. The same holds true for finances.