It’s the final days of 2018, and whether you’re excitedly awaiting the arrival of the new year or simply celebrating the survival of this year, you’ve probably given some thought to what you want to do in 2019. For roughly a third of Americans, that means making a new year’s resolution related to your finances. Resolutions are tough to adhere to without a plan in place, so we have put together some helpful financial tips to focus on in the new year.
The first step to reaching your financial goals is to identify your financial goals. What is most important to you both in the short term (like paying off credit card bills from the holidays) as well as long term? It is okay if your goals differ from your friends’ and neighbors’ goals, or even if they have changed from this time last year! Narrow it down to several areas that are most important to you and your family. Some popular goals include:
– Maxing out retirement contributions
– Paying off bills/paying down debt
– Funding Health Savings Accounts or 529 plans
– Spending better
– Budgeting better
– Finding a financial advisor
Once you’ve selected the areas you most want to focus on, it is time to set your goals. Be specific! Whenever possible, try to use numbers, dates, and reasons instead of just generic terms like “less” or “more.” For example, phrasing your goal as, “Put away an extra $2,000 by May 1st for our family vacation to Disney,” is more motivating and effective than simply setting it as, “save more money.”
Now that you have specific goals set, the hard part begins: following through!
Paying down debt
Have credit card bills piling up from the holidays? Make it a priority to pay them off as soon as possible. You may have to cut down spending in other areas to achieve this goal, but you’ll feel better without the weight of credit card debt to begin the year.
Want to pay off larger amounts of debt like student loans? Don’t worry about paying it all off right away. Instead, focus on paying the amount needed to fast-track the payment plan. This may mean making a higher monthly payment, but will go a long way in reducing your long-term burden.
If retirement savings is at the top of your list, set a goal to increase or max out contributions to your 401(k) plan, or set up an IRA. If your employer offers 401(k) matching, make sure your contributions are enough to qualify.
If you want to save more for your children’s college educations, consider 529 plans. Not only are they a great way to start saving, many states offer tax deductions for contributions made to the plan which could put a little extra money in your wallet come April.
Want to save extra money for medical costs? A Health Savings Account, or HSA, could be a great goal for you. Those who qualify can put away pre-tax money to help cover doctors’ visits or unforeseen medical costs.
For many people, budgeting is an important area to improve upon in the coming year. Learn from last year’s mistakes. Try to identify a poor spending habit of yours and focus on improving it. For example, maybe you want to eat out less or do a little more legwork comparing prices before buying new goods.
Try committing to spend-free days. Pick a day each week or month and commit to not spending any money. This may mean eating in, finding something free to do for entertainment, or avoiding online shopping. Even a little step like this can go a long way!
Get help from professionals
If you’re serious about getting your finances in order in 2019 and for future years, it is time to enlist the help of a financial professional. Financial advisory firms, like Marietta Wealth, can play a pertinent role in obtaining your financial goals. If you are ready to take control of your finances and have the retirement you have dreamed of, please contact us.