Every year, you are probably bombarded with friends (and advertisements) chatting on about New Year’s Resolutions for weight loss, business ventures, traveling, etc. Then the year rolls around and none of these goals seem to be accomplished… Nonetheless, I really support the concept of New Year’s Resolutions!
Every time we write down a goal, we come a major step closer to achieving it.
So, let’s talk about setting financial New Year’s Resolutions. Perhaps you don’t know where to start?
Here are suggestions on what kind of financial goals to set. Adapt them to match your own situation!
1. Create and stick to a budget OR adapt the principle of financial mindfulness
For some people, a budget is exactly what they need to understand their own finances and be held accountable. For others, they just need to be cognizant of their limitations. Whichever crowd you fall into, do it well.
2. Increase your retirement savings by at least 1%
First, if you have a 401(k) available to you and aren’t using it – start! Start here if you need some help.
If you are already saving 5% of your income, set a goal to increase that to at least 6% this year. Keep increasing it until you are saving 10-15% of your income.
Over achiever? Give yourself half of your raise. If you earn a 4% raise this year, give your budget a 2% raise and give your retirement a 2% raise. You save more AND keep your standard of living lower.
3. Update your estate documents
Your estate documents (wills, trusts, powers of attorney) should be reviewed every 5 years or after significant changes in either your life or the law.
If don’t have any documents yet, start HERE.
4. Shop for better car insurance
How long has it been since you compared car insurance policies? Companies are pretty competitive with each other. You might be able to get a better deal! I have some thoughts on things to watch for when shopping for car insurance.
5. Buy umbrella liability insurance
Umbrella liability insurance is such an inexpensive way to protect yourself! Everyone should look into it. Maybe you have enough liability protection… maybe you don’t! Take an hour to do some research and talk to a professional about it. I don’t think you will regret it.
6. Organize your filing cabinet
Nothing screams “New Year’s Resolution” like getting your filing cabinet organized! Trust me, it will be satisfying. 😊 Read my tips HERE.
Folks, I have seen people with dozens of investment accounts and stock certificates scattered over just as many investment companies. It’s a mess, they don’t know how much money they have, and they can’t keep track of their statements. It is the antithesis of organization.
Maybe this would be a good year to consolidate!
8. Prepare an emergency binder
Creating an emergency binder is a simple way to improve your organization. It is also a goal you can quickly check right off your New Year’s Resolution list!
Enjoy the last few weeks of 2020, wish it a GRAND farewell, and start planning on how you are going to set yourself up for success in 2021!
If you set other unique financial goals for yourself, email me! I would love to hear about them.