It’s that time of year when many people set goals with the hope of changing their lives in the months to come. Some may set their sights on losing a significant amount of weight or training for a marathon, while others may want to spend more time with family or other loved ones. Whatever your plans, consider adding a few of the financial changes described below to your resolution list, too, to help you turn 2020 into an even better year.
PAY DOWN DEBT
Having debt is normal, but having too much debt—particularly as your credit card statements start flowing in after the holidays—can quickly become overwhelming. As you start the year, make a plan to pay off the debts with the highest interest rates first. Also, it’s always wise to pay more than the minimum payment. So if you’re financially able to pay a bit more than the monthly amount due on your mortgage, car loan, or other debt, do so. You’ll pay off your debt faster and save more on interest in the long run.
INCREASE YOUR SAVINGS
Now that we’re exiting the season of “spend, spend, spend,” it’s time to focus on saving. Perhaps you’d like to save for a dream vacation, a down payment for a new home, or an emergency fund to cover the unexpected. By setting a goal and outlining a timeline and strategy for reaching it, you’ll find it easier to achieve your desired result.
DEVELOP A BUDGET
Budgeting isn’t exactly glamorous, but even the Warren Buffetts of the world need to incorporate a budget into their financial plans. When developing your new budget, it may help you to think of it as a spending plan instead. How much will you spend on food, entertainment, and education during the year? By planning out your expenditures, you’ll have a better understanding of where you’re allocating your income and how much is available to spend on each activity in a given week, month, or year—whichever timeline best suits your planning style.
START A COLLEGE FUND
Education expenses have continued to increase, so the sooner you can begin putting money away, the better off you’ll be. Whether you are saving for a child’s or grandchild’s—or your own—education, there are multiple investment tools that can help you develop an effective college savings plan. Work with your financial advisor to evaluate your unique situation and select the best option for pursuing your goals.
ASSESS LIFE CHANGES
As our lives change from year to year, we may not be aware of how these changes can affect our financial health. Embarking on new career, welcoming a new baby to the family, purchasing a new property, or even just getting one year closer to retirement may all require you to revisit your financial plan and long-term goals. It’s a good idea to review your insurance coverage, retirement plan, will, and estate plan annually to ensure that all aspects of your life are incorporated.
ACHIEVING YOUR FINANCIAL FITNESS GOALS
These are just a few changes that can help improve your overall financial health. Try incorporating one or two into your resolutions for 2020, and check in with yourself regularly to evaluate your progress toward your goals. You might be surprised how quickly things can change for the better when you commit to improving your financial life. As always, your financial advisor can help you stay on track toward your goals and reevaluate your options at any point along the way.