Make 2017 Your Best Year Yet!
Ready to start the year off right? Then the best thing you can do is set out the right resolutions to create the year you truly want to have.
Let’s break down some expert advice about financial New Years resolutions, setting the right ones and sticking to them.
1. Set specific goals. Instead of saying to yourself, “I’m going to pay down my debt in 2017,” pick your credit card with the highest interest rate and focus on paying that one off by the end of 2017. If that’s not possible, aim for paying it down by 50%.
Lilly Alvarez, 58, of the Twin Cities area, says she and her husband tally up all the interest they paid on credit card debt and the mortgage in the current year and then set a goal to reduce that amount by 25% in the coming year. “Even if we don’t meet that goal, and we almost never do, we actually do wind up paying less in interest year after year,” Alvarez said.
2. Break giant goals into smaller, more realistic and attainable ones. For example, if you have $20,000 in credit card debt and plan to slash that down to $10,000 by the end of 2017, consider what this really means. It means not only reducing your debt, but not adding new debt. So be honest with yourself and resolve to make resolutions you won’t have to abandon.
3. Get your family, or at least your significant other, involved. This helps keep you accountable and helps explain why certain household expenses may need to be curtailed.
Beth Karpinski, 74, of south Florida, talks regularly to her sons and her adult granddaughter about her finances, especially since the passing of her husband of 28 years. “It’s better if everything is just out in the open,” she said.
4. Make financial resolutions that aren’t about saving more, spending less or reducing debt. “You can also focus on more administrative tasks, like making sure you have the right beneficiaries listed on assets such as your retirement account,” says Ken Hevert, senior vice president of retirement at Fidelity Investments.
– via Forbes
A Few Great Ideas
Now that we know more about how to set your resolutions, let’s talk a bit about specific ideas you could try to make 2017 your best financial year so far.
Make extra mortgage payments
Resolving to make an extra payment or two toward your mortgage can be a great way to start the year. By making an extra payment each year, not only are you reducing the time and amount it will take you to pay off your home, but you will be reducing the amount of interest those greedy banks receive. Since most mortgage interest rates are well below those of credit cards, it is important that you review any other debt with higher interest rates that may need to be dealt with first, before putting extra money toward your mortgage.
Find ways to generate side income
Picking up extra income can be a wonderful financial resolution. In a suffering economy, the peace of mind and supplemental income that comes with a second job or side business can be a great buffer against the stresses of economic strife. Even an extra hundred dollars a month can be a great way to reach other financial goals like paying down debt, making an extra mortgage payment or starting an emergency fund.
Start a rainy day fund
If you don’t have one already, starting an emergency fund can be a good New Year’s resolution. You never know what tomorrow might hold when it comes to your finances, but with an emergency fund, you can face the unknown with a bit more confidence. While some financial gurus call for you to have $500 in the bank, you may want to stash a bit more than that. $500 won’t get you far these days, especially if you lose your job. Even one or two months of your average income can go fast, so build up a fund you’re comfortable with. Bear in mind that if you have outstanding credit card debt, you might want to deal with that first to eliminate those costly interest payments.
Invest in your retirement
It’s never too early to start planning for retirement – and these days it’s hard to count on anyone but yourself to do it. Setting aside money for the future, whether in an IRA, 401k, 403b, or even just a savings or checking account can start you on the path to a financially secure retirement.
Understand your investments
It is amazing just how many of us hold investments that we know little about. Nothing illustrates our lack of financial education better than the recent mortgage meltdown where many homeowners had no real understanding of the mortgages to which they had committed. Many of us associate understanding our investments and financial situation with knowing what stocks we own or how much we’ve contributed to our 401k. Those are great first steps, but to commit further, we should understand topics such as where that money is invested, how much our credit costs us each year, how our Social Security benefits are calculated, and other similar financial information.
– via www.moneycrashers.com
What are your financial New Years resolutions?