New year financial resolutions play a vital role in resetting priorities and establishing a plan for financial success. Often, individuals and families accrue avoidable debt due to a lack of careful planning. Whether you're making these decisions for yourself or assisting friends and family, this guide can help others achieve their financial goals.
If you're seeking inspiration to enhance your finances in the upcoming year, here are eight resolutions to consider annually:
1. Update Your Goals
Track your progress throughout the year to identify what's working and areas for improvement. Regular monitoring ensures informed decisions when setting new goals.
2. Assess Your Net Worth
Understand your financial standing by calculating your net worth. Add up your assets and subtract your liabilities, including debt. Assets may include money in retirement accounts or investments, while liabilities encompass student loans and credit card debt.
3. Clear Your Debts
Pay off debts promptly to minimize interest payments. Develop a monthly plan for debt repayment and stick to it. Use credit cards responsibly, paying off the balance each month to avoid interest charges.
4. Revise Your Retirement Savings
If you've delayed saving for retirement, now is the time to resume. Aim to save 15% of your income, but start small if needed. Initiate savings to build a comfortable retirement fund over time.
5. Emergency Fund
Establish or bolster your emergency fund. Having three to six months' worth of living expenses set aside provides a financial safety net for unexpected events.
6. Rebalance Your Portfolio
Ensure your investments are efficient by periodically rebalancing your portfolio. Avoid the risk of scattered investments that may harm your overall portfolio.
7. Monitor Your Credit Report
Regularly review your credit report for errors and updated information. Address any issues by disputing errors or obtaining a copy of your credit score.
8. Enhance Financial Education
Commit to expanding your financial knowledge. Attend workshops, read books, or take online courses to better understand investing, budgeting, and other financial concepts.
By adopting these additional financial resolutions, you'll set the stage for a financially successful new year. Commit to at least one of these steps, and soon you'll be on the path to financial control and bidding farewell to debt for good!