New Year’s resolutions are often focused on physical and mental health improvements such as exercising more, eating healthier, and spending less time on social media. These goals can be a great way to improve your life, but there is another important area that you should consider – financial health.
The actions you take this year can set you up for financial success. So, do your future self a favor and include financial goals in your New Year’s resolutions. Like all goals, your financial resolutions will be specific to your situation, but here are six ideas to get you started.
#1 Save More for Retirement
No list of financial goals would be complete without mentioning retirement savings. If you add more to your retirement accounts this year, you get one step closer to the nest egg you need for a comfortable retirement. Taking this a step further, the earlier you save, the more time you have to reap the benefits of compound returns.
There are many ways to save more without impacting your monthly budget. One common way is to save your raise – meaning devote your annual salary increase to retirement. You won’t miss these funds in your monthly budget, but they can help you make significant progress toward your retirement goals.
#2 Make a Budget and Stick to It
One of the most important things you can do for your financial health this year is create a spending plan and stick to it. Short-term spending goals help you ensure your needs are met in the present and help free up cash to add to your retirement savings – making budgeting a win-win for your financial goals.
A successful budget starts with an honest look at your current spending. You can do this by reviewing your credit card and bank statements for the past year to understand how you spent your money. Then, you can set reasonable goals for improvement in the new year.
#3 Choose Wise Investments
The power of compound returns can help your money grow more quickly than saving alone. However, you need to choose investments that match your situation and goals. If you don’t, you could be exposed to more risk than you feel comfortable taking or miss out on potential growth.
There are thousands of stocks, bonds, mutual funds, and ETFs available. You could spend hours evaluating these investments and still make an uninformed choice. On the other hand, you could discuss your investment decisions with an experienced financial advisor who has a system for narrowing down the wide array of options and matching them to your unique situation.
#4 Build an Emergency Fund
Everyone needs money set aside to handle the unexpected – like car trouble, home maintenance, or employment changes. This emergency cash gives you peace of mind and keeps you from going into debt or dipping into retirement savings to deal with an unplanned expense.
Conventional wisdom says you need enough cash in your emergency fund to cover expenses for three to six months. Prioritize growing your emergency fund so you can reach your savings goal this year.
#5 Reduce High-Cost Debt
High-interest debt erodes your budget and can even prevent you from saving for financial goals. If you are spending a large portion of your monthly budget on loan payments, set a goal to reduce your debt this year.
One common method for tackling debt is to pay off the loan with the highest interest rate first, since eliminating that debt would save you the most money spent on interest. Another option is to pay the debt with the lowest balance first. Then, use the money you had been paying toward that loan to reduce larger ones.
#6 Improve Financial Literacy
One of the simplest goals you can tackle this year is to improve your financial literacy. Financial knowledge boosts your confidence and can have a significant impact on your financial health.
All you need to do to improve your financial literacy is read one or two articles per week. Then, make a list of questions to ask an experienced financial advisor who can provide the clarity you need.
An experienced advisor can not only help you improve your financial knowledge, but they can also help with every goal on this list. The right financial partner will help you understand your current financial position, put goals into words, and create a customized plan to get there.
Review Your Financial Goals with the Team at Meld Financial
At Meld Financial, our experienced team of tax, legal, and investment professionals can help you set specific goals to improve your finances this year. We can also help you plan your financial future with our comprehensive wealth management plan – Financial Fingerprint®.
In a single, one-hour meeting we can develop your Financial Fingerprint®. It covers the most important aspects of your financial life including retirement, investments, and even government benefits from Social Security and Medicare.
To learn more about Financial Fingerprint® or to discuss your personal financial situation, contact us today.
