4 New Year’s Resolutions that Will Improve Your Financial Situation
The New Year is here, and if you haven’t already set some resolutions for yourself, it’s not too late. The most common resolutions are usually health related, but there’s another category that many people resolve to improve at the beginning of the year—their finances. If you’ve been thinking of improving upon your financial situation this year, consider making some of these New Year’s resolutions.
Do Some Estate Planning
This is an especially important resolution for adults with an established income and dependents. However, don’t think that this is only something for people over 50 to worry about. Far too many young adults have unexpectedly passed away without a will or trust, leaving their families with many financial and legal difficulties to wade through.
So, this year, make a resolution to meet with an estate planner. This will help you to organize your property and finances and ensure that the most important things are properly handled should anything happen to you. Doing this can also give you a clearer picture of your current financial situation so that you can make other necessary adjustments throughout the year.
Contribute to Retirement Accounts
Recent surveys have shown that 66% of millennials have nothing saved for their retirement—a scary statistic for a generation whose oldest members are in their 30s. Regardless of whether you’ve started saving or not, most people can afford to do a little better in planning for their futures. So why not make a resolution to contribute more to your retirement accounts this year?
If you haven’t opened any retirement accounts, talk to your employer to see if they have a 401k plan. Many employers will also match contributions up to a certain amount; if you can maximize the employer match on this kind of plan, you’ll essentially be getting free money added to your retirement. That’s not something you want to miss out on.
If your employer doesn’t have a 401k plan, IRAs are quick and easy to open. There can also be tax benefits to contributing to these accounts. In fact, if you open one and contribute to it now, the amount you put in can reduce your taxable income from last year, which could give you a larger refund, or reduce the amount you owe on your tax return this year. Then, set up automatic deposits to your retirement accounts every month, so you’re not tempted to spend the money before making your contribution.
Pay Down Your Debts
Debt is a perfectly normal part of life. From getting an education to buying a home, most of us will spend a significant portion of our lives in debt to someone. However, if you have any high-interest debts (this is usually in the form of credit card debt), one of the best things you can do to improve your finances is to pay those off as quickly as possible.
High-interest loans will quickly drain your finances and keep you from making any progress on your other financial goals, so take care of those as soon as you can. It is usually best to make payments on these loans as soon as you receive your paycheck each month. If you do this, it will be easier to curb the rest of your monthly spending to fit into your remaining budget, rather than trying to pull together a payment at the end of the month.
Create Another Income Stream
“Side hustles” are becoming increasingly popular these days. With ever-improving technology, it is now incredibly easy to provide goods and services over the internet while receiving reliable payments. So, make it your goal this year to brainstorm ways to bring in additional revenue. This doesn’t have to be a groundbreaking business idea. It can be something as simple as crocheting hats and matching scarves and selling them online.
Find something that you enjoy doing and that you’re good at, and find a way to turn that into a revenue stream. Look into online marketplaces for selling your goods, or contract labor sites like Upwork for providing skilled services. Even if you only make $100 a month from it, that additional revenue can go a long way towards helping you meet your other financial goals.
Improving your finances is not something that is going to happen overnight. Remember, these New Year’s resolutions are something that you’re meant to work on throughout the year. So, even if you struggle with them for the first few months, don’t give up on them. For assistance with estate planning, tax preparation, and other important financial services, contact us.
Camputaro and Associates
Certified Public Accounting Firm
136 N. Orchard Street, Suite 8
Ormond Beach, FL 32174