7 Financial Resolutions To Make For The New Year

Everyone is always thinking about what kind of resolution they are going to dedicate their time to in the New Year. Some opt for health-related resolutions like exercising more, eating better, and throwing away the cigarettes, and still others tend to focus on educational and career goals. With the holiday season in full swing, however, one set of resolutions you might not have stopped to think about are your financial resolutions.

Once all of your holiday gift buying is over, what are your finances going to look like? Did you remember to save for some of your upcoming expenses in 2016, and do you have a cushion for any unforeseen expenses like auto and medical issues? All of these are questions you should be asking yourself now (or should have already) in order to be better prepared for the upcoming year. If you haven’t already done so, sit down and write down some financial goals you wish to accomplish in 2016, as well as certain actions you can take now in order to optimize your financial situation. Here are seven ideas to help get you started.

1. Make a budget

The best way to start saving money is by making a budget for your monthly or yearly expenses. Take a look at your current accounts, and also how much you owe each month for bills, utilities, and other such expenses like gas, groceries, and miscellaneous spending. Once you know how much you have left each month after expenses, you will be better able to make smarter financial choices and keep your credit and accounts in good standing. 

2. Have an emergency fund

Nobody likes the idea of becoming trapped in a financial hole because of an unforeseen event or circumstance, encompassing everything from a medical issue to auto repair expenses. When you make your budget, include a percentage of your income to go to your emergency fund or savings account. This will help you balance your bills as you go along through the year, while simultaneously protecting your income from being drained by a single occurrence.

3. Retirement planning

It’s never too early to start planning for your retirement, but if you are getting closer to that time then you will definitely want to pay attention to your finances in the upcoming years. If you have a 401(k) or IRA account that your employer contributes to, retirement planning becomes that much easier, but if you do not, another good way to start planning is by including retirement savings in your budget. You can also discuss options like independent IRAs, investment funds, and stock options with a financial advisor.

4. Pay off your debt

Start the next New Year off even better by putting a significant dent in your debts this year. You can include paying off debts you owe from credit card payments, student or personal loans, and other miscellaneous fees you might owe. Consulting with a financial advisor about how best to go about paying down your debt and how you can budget for such spending is a great way to get started.

5. Find a financial advisor

Going right along with budgeting, retirement planning, and financing is finding a financial advisor you can trust with your finances. Not that you absolutely have to have an advisor, but they can definitely help get you in a better financial position. The best way to start is by visiting the National Association of Personal Financial Advisors (NAPFA), a network of non commission-based financial advisors and firms that can help you build a solid financial plan without the worry of pressuring you into buying some sort of financial product.

6. Plan for big events

Besides retirement, the New Year is a good time to start planning for other life events, especially ones you already have lined up in your plans. These include things like buying a car or house, saving for college, having a baby, and/or travelling. There are a variety of financial accounts that you can open to help you buy a home and save for college, but again, a financial advisor will be able to help you with the specifics.

7. Shop smarter

Even at the height of the spending season, there is never a bad time to start paying attention to your budget when you shop. Be sure to check prices before you purchase items, and always look for in-store bargains and discounts. There are also countless websites and apps out there that can help you save money on everything from clothes, to movies, accessories, cell phones, laptops, and restaurant dining.

Avoiding small fees on things like ATM withdrawals and credit card charges is another smart way to cut down on miscellaneous expenses that add up quickly. Before you go shopping, consider stopping at the bank to make a withdrawal and only spend with the money you have on you. This will help you budget your shopping spending much better and leave you feeling more confident in your spending budget.