The New Year is a time rife with opportunities for self-improvement. From gym memberships to new diet plans, a focus on relationships and plans for travel, many of us fail to make the resolutions that could make the most difference for us—financial decisions that could shape 2016 into your best monetary year yet. Financial vices are rampant, but with a bit of foresight and some willpower, your wallet will be fatter come next December than you’ve ever seen it before. We are rounding up some financial resolutions that you can make for the new year ahead!
You might think you have a good overview of your finances, but it never hurts to do a new inventory. Check on each and every financial account, looking at monthly cash flow, debts, and assets. This inventory will help you determine the financial areas that need the most work, and it’s the easiest resolution on this list.
Time for Budgeting
The best financial resolution you can make is to decide to create an annual budget. Sit down and create an airtight budget for the next 12 months. Budgeting is something everyone can benefit from, but recent estimates claim only 39 percent of adults actually sit down and take the time to do so. Gather your statements and receipts from the previous year, and list the recurring expenses you know you’ll need to include in your budget. From travel to recreation, schooling to food, detail exactly how much you’re willing to spend each month and stick to it.
Then, compare these costs to your forecasted monthly income, making sure to set aside at least a small amount for an emergency saving fund. If you need some extra help, consider using Mint.com for easy budgeting guides.
Follow a Tax Schedule
Don’t procrastinate on your taxes. Some estimates find 28 percent of Americans wait until the last minute to file their taxes, and in the rush to get them done in time, may forget lucrative deductions and get the numbers wrong. Give your taxes the time and effort they need, and get help from a website like Communitytax.com to make your life easier and avoid costly mistakes.
Never Make a Late Payment Again
If you’re making late payments, you’re costing yourself a lot of unnecessary cash. Whether you sent in your check late due to forgetfulness or a mailing issue, the ramifications of getting your payments in late are felt long after your bill gets paid. This resolution is simple: simply set all of your accounts up for automated, recurring payment and never worry about sending your payment in again. Whether you set it up to pay the minimum or the full balance, you’ll protect your credit score from unnecessary damage.
Get Out of Debt
If you’re in debt, you’re not alone. Americans seem to have a penchant for racking up large debts over time, evidenced by the $38.8 billion dollar credit card debt racked up by United States citizens in 2013 alone. If you’re ready to get out of that financial disaster, you have a bevy of pay-off options to consider, and these two are often the most popular routes taken.
Utilizing the snowball method means focusing your attention on the accounts with the lowest balances. This works well for those who are feeling overwhelmed with the amount of debt balances they carry, and can be a huge psychological help for making a large debt seem more manageable. If you decide to use this method, list your accounts in order of balance, from smallest to largest. During your budgeting, set aside the funds to cover each account’s minimum payment. After you’ve covered these expenses, use your surplus towards the remaining portion of the smallest account on your list. As you continue to pay off debt by debt, use the surplus money to tackle the next on the list.
If you’d like to avoid paying the high interest rates on your debt, the avalanche method is your best bet. List your accounts by order of interest rate, from highest rate to lowest. Put aside the necessary funds to pay the minimum amount for all accounts. Use the surplus to begin tackling the account with the highest interest rate first, once each is finished move down the list. This will help prevent you from overpaying for your costs covered by credit—especially right after the holiday season.
Be Diligent with Protection
It seems every day you hear about a new hacking crime or cyber theft scheme. Do what you can to prevent your personal information from becoming prey to an opportunistic identity thief. Protect your Social Security Number, keep your mailbox locked (sensitive information on bills and the like can be a gold mine to thieves), and only enter your financial information on secure websites (hint: while not foolproof, sites that use the prefix “https” are less vulnerable to hacking).
Make 2016 the year of your best financial decisions by implementing these simple resolutions and reap the benefits for years to come.
(photos sourced from: pexels.com || sponsored by Purple Camel Media)