Kick-Start 2018 With These 5 Financial Resolutions!
Get more exercise. Lose weight. Quit smoking. These are the bold boasts of New Year’s resolutions. Folks commit themselves to radically changing their lives at the start of the calendar year. About 45% of people make New Year’s resolutions in the average year, and most have to do with health.
But the same line of thinking can be taken in the context of your financial health. Let’s look at some of the most oft-made New Year’s resolutions and how to translate them into personal finance resolutions. We’ll also have a few tips on how to stick to them!
1.) Quit smoking = Give up credit cards
Similarly addictive and no less bad for you is credit card debt. The monthly payments drain your income and the revolving door of debt keeps you from ever getting ahead. Beyond the immediate concerns, long-term credit card dependency can ruin your credit and hurt your chances of enjoying a long, happy retirement.
Make a resolution to lose your credit card “addiction” in 2018. Make this the year of living within your means while borrowing responsibly.
2.) Lose weight = Trim the fat from your budget
There’s another place you can trim fat besides your belly: your budget. Make a plan to sit down with your spouse and discuss how you spend money each week. Look for places you can make cuts without sacrificing things you both enjoy. Pay special attention to groceries and meals out.
Don’t feel like you have to give up everything at once. If you’re eating out twice a week, don’t try to go immediately to zero. Just as you need to start slow when working out to avoid injury, feel free to start slow with cutting back your expenses. That way, you avoid the potential for snapping back harder.
3.) Cut down on stress = Save for big events
The holidays are an expensive time of year. Many families finance their gift-giving with credit cards, and that bill will come due in the next few weeks. Talk about stress! Starting 2018 in a financial hole can hamper your plans to live a stress-free year.
Instead of beating yourself up about it, resolve to do better next year. Start a holiday savings account. Make regular deposits to a dividend-bearing account so you’ll have the money to pay for the next round of holidays yourself. It might not do much for January 2018, but you’ll be thanking yourself in January 2019.
4.) Get healthy = Start investing
To set yourself up for a bright financial future, start planning for your retirement. At the very least, make 2018 the year you max out your retirement contributions. If you don’t have an IRA or similar retirement account, that’s another good place to start.
Looking at a number like $5,500 (the maximum IRA contribution in 2017) can be discouraging. Who has that kind of money sitting around? It’s helpful to break that down – $458 out of each month’s income will get you to the maximum. You can set up automatic withdrawals that go into an IRA or savings account to make the process go more smoothly.
5.) Family time = Make a will
Time is short. Spend it with people and things you care about. The holidays are a time to rekindle connections with family members who may have grown apart over the years. There’s no reason that relationship has to fade. Enjoy the time you have with the people who mean the most to you.
That same realization that life is short should be a call to make sure your finances are in order. Making a will can help to ensure that your passing will be another time of family togetherness.
This resolution really doesn’t take too long. Make an appointment with an estate planning attorney to make sure you’re covered. You can take care of it in an afternoon.