New Year’s Financial Resolutions
by David Sung
The holiday season is a time to celebrate with family and close friends. It’s also a time of reflection, as another year comes to a close and we look back at the last 12 months. Many people set goals, or a New Year’s resolution, for themselves heading into the New Year. They range from superfluous to life changing, and their success rate, if one were to admit to one, may be rather low. But there are fewer things more important than your financial health, and in 2014, it’s time to make it a priority.
If you’re ready to get your financial house in order, start with the tips, from big to small, outlined in today’s financial blog:
Save it Before You See it
One common problem for everyone is seeing a big number in our checking account, which causes people to splurge. While a little splurging is fine, you need to ensure that your financial future is set before you hit the ATM. Most banks will allow you to automatically route a set amount of money to your checking account on a day that you select typically the day you get paid. By doing so, you’ll ensure that your splurging won’t leave you empty handed if an emergency arises.
You should also take advantage if your company offers retirement benefits, such as a 401(k). Work with your company to have a percentage of your pay put into the retirement plan. It may seem like a tough choice, but this money will be working for you until you retire, and you’ll then be able to reap greater benefits.
We all likely have some form of debt: a car loan, credit cards, a home loan and many other forms. Don’t let them, and the interest pile up. Prioritize the loans to eliminate them. One popular method is the snowball method, where a debtor pays their maximum available amount in the budget to one loan, while paying the minimum on the others. Once the first debt has been cleared, the sum of the initial payments are made on the second loan, quickly clearing debts over the months.
Save, and Invest
Investing can seem intimidating, but the reality is that anyone can start investing. It’s a great way to ensure returns on your money. At the very basic level, your savings should be kept in an interest-bearing account, typically offered by most banks, or in a certificate of deposit. Once you gain more confidence, you can begin dabbling in mutual funds, or money market funds. There are also many resources for investing in bonds. Stocks are typically more long-term investments, and should be approached after getting your feet wet or discussing them with a trusted advisor. No matter what you choose, making your money work for you is always a good option.
In 2014, make money a priority and get back on the right financial path. It may be difficult, but you will reap the rewards in the future.
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