Financial New Year's Resolutions You Can Keep (Part 1 of 2)
Now's the time to reflect on the year gone by and plan for the year ahead. Did you make any resolutions about your finances last January? If so, did you meet your financial goals, or did you fall short?
Did you know that about only 8% of us really achieve our New Year’s resolutions?
With that said, you can start fresh in 2018! Here’s some advice on financial changes you can make to ensure better results this year.
Calculate Your Net Worth
If you haven’t done so already, this is the perfect time to determine your financial well-being. The “old-fashioned” way--pen and paper--is a great way to write down and see all your assets and liabilities. It will give you a clear picture, good or bad, so you can evaluate your current spending and saving habits. You’ll have a transparent view of your spending and savings, and will be able to make necessary corrections to avoid overwhelming debt and start progressing towards your financial goals.
Create a Monthly Budget
Stop procrastinating and start making a monthly budget to help you control your spending. I also recommend doing this with your partner, so you're on the same page with your finances. Want more info on how to create a budget? Read about it here. A budget will help you update your savings and reduce your debt.
Reset and Rebalance your Retirement and Investment Portfolio
If you're employed, you'll want to ensure you reach the maximum contribution amount via your employer-sponsored plan. Can’t afford to save that much? Contribute as much as you can realistically afford to cover ordinary expenses. If you're self-employed, you can contribute to a SEP IRA, profit-sharing plan, or an independent 401(k) plan. You may want to review and rebalance your investment portfolio, as some sectors will have over-performed and other sectors will have under-performed.
Next week, we'll talk about more financial resolutions you can keep!