New Year’s Resolutions
Updated: Aug 4, 2020
If you have been to the gym recently, you have probably noticed the large increase in traffic. Going to the gym in January can feel more like waiting in line during Black Friday than working out. Gyms and health clubs in America have been packed since the New Year as many vow to get back into shape.
Getting back into shape is the most popular New Year’s resolution. According to Time magazine, the top 10 resolutions are: lose weight/get in shape, quit smoking, learn something new, eat healthier/diet, get out of debt/ spend less, travel more, be less stressed, volunteer, and drink less.
Only one out of the top ten resolutions is about financial betterment. To make matters worse, that one is a vague, hard to define resolution. With that in mind, I wanted to create a list of five financial goals that can improve financial lives. The goals below are far easier and less time consuming than spending 30 minutes daily at the gym and cutting out donuts. Most of these goals can be automated and set to auto pilot once they are established.
Create or follow a budget – Budgeting, in some form, is a foundation of financial success. For many, it’s a difficult task. Whether you are counting every penny or just making sure you are not overspending, knowledge is most important. Do you know how much you spend on entertainment each month? If a full year budget seems daunting, take it month to month or even week to week. Try to stay on budget from week to week (little victories). If it is still difficult to keep track of money, try using cash.
Establish or boost emergency funds – If you do not already have an emergency fund, now is a great time to do so. Emergency funds should be kept separate from your checking account and used only for emergencies. For better success, enroll in an automatic transfer program from a checking account. An automatic transfer will put this goal on auto-pilot.
Create a plan or increase effort to reduce debt – Prioritize debt with high interest rates and work to pay them down first. Try putting an extra $50 or $100 towards debt weekly or monthly. This too could be set up on an automatic payment schedule to help simplify and achieve this goal.
Contribute or increase retirement savings – Contributions are the one variable in retirement planning we can control. Market performance, interest rates, and retirement ages will all vary, but we can control contribution amounts. Knowing that, increasing retirement contributions by 1% of salary or a specific dollar amount will make a significant difference over the course of 10, 20, or 30 years. Try to allocate 10% – 15% of gross salary towards retirement. Also, think about establishing a Roth IRA for its tax benefits.
Update or create a will / trust – As our lives change, it is important to make sure our estate plan is current with our wishes. Updating a will or trust is something that is often overlooked. A current will or trust ensures your wishes are achieved if a disaster were to happen.
Selecting even just one of the above five resolutions for 2017 will improve your financial life.
I challenge everyone to set at least one financial goal for 2017. Creating accountability will increase the likelihood of accomplishing your goal. To do so, discuss your goals with family and friends. If you are competitive, turn it into a competition. There is no time better than the present to improve your financial future.
I would love to discuss or help with your 2017 goals!
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