Eat better. Work out. Quit smoking. Travel more. These, along with “manage finances better,” are some of the most popular New Year’s resolutions, and sticking to them is always a challenge. However, there really are some that we would all be better off keeping – especially the ones regarding checking and savings accounts. Check out my recommendations for financial resolutions you can and should keep this year. They’ll be a whole lot easier to follow than a strict new workout and diet regimen.
Whenever someone asks me for financial advice, I usually reply with a question: Do you have an emergency fund? Far too many people don’t, and they typically don’t have a good answer to my second question, either: Why not?
If you don’t have one, begin the new year by building an emergency fund, even if you‘re starting with only $5 from each paycheck. Ideally, you want to work toward having six months of living expenses in some type of liquid account, but I advise initially having $1,000 in your emergency fund. This will help if you encounter anything from car trouble to a medical emergency.
Face Your Debt
Once you’ve established an emergency fund, it’s time to take note of your debts. Whether it’s credit card debt, student loans or a mortgage, your debt won’t get any smaller if you ignore it. Look for ways to pay it off faster. Try cutting cable or restricting your nights out on the town. Small changes to your lifestyle (and the money you save by making these tweaks) can make a huge difference in the amount of interest you ultimately pay. If you can challenge yourself to shake up your routine now, you’ll be thanking yourself in a year’s time.
Make a New Friend
Start the year by meeting with your financial planner. A yearly meeting to make sure you’re on track is a must. If you don’t have one, get one! Look for someone who has experience with investment as well, since this will help you look toward long-term savings and hopefully motivate you to start planning for your future. For as little as a $50 monthly contribution, you can start investing for your retirement. That’s a resolution you’ll be very glad you kept!
Kat's Money Corner is posted on Dollars & Sense every Tuesday. Kat Hnatyshyn, when not blogging or caring for her little ones, is a manager with CommunityAmerica Credit Union. For more financial chatter, click http://twitter.com/savinmavens or visit http://communityamerica.com.