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Start the New Year Financially Fresh

A new year brings the opportunity to reflect on your life and set new goals for the year ahead. While a lot of people set resolutions to live healthier, get more organized or learn a new hobby, not everyone remembers to reflect and set financial goals for the new year. In order to financially set yourself up for success this year, it is important to evaluate where you are and set manageable goals for yourself.

Start the new year off financially fresh with these four tips.

1. Reevaluate your budget.

If you don’t have a household budget, this is a great time to start. If you do, make sure you review it every year to make sure it still aligns with your financial priorities. Assess your monthly income and fixed and variable expenses and decide what your goals and priorities will be for your finances this year. This is also a good time to review your current subscriptions and other reoccurring charges. Evaluate whether there is anything you can cut because you don’t use it anymore or if there is a cheaper option you could switch to.

2. Tackle your debt.

Start taking care of your debt first by writing down everything that you owe. If one of your debts has a significantly higher interest rate, work on paying down that one first. If they are all similar, start with the smallest account. Along with making your monthly payments on all your accounts, use any extra cash you have to pay towards the one bill you are prioritizing at the time. When you finish paying off one, use all the money you had been putting toward that bill and start paying down the one with the next highest interest rate or your next smallest account. Having a focused approach will help you keep the momentum through the year.

3. Check your emergency fund.

Do you have sufficient savings built up to have at your disposal in case of an emergency? If you dipped into your savings in the past year, now is a great time to see how much you need to allocate to build it back up. Having funds transferred automatically every month is a great way to accomplish this with minimal effort. Most experts say it is best to have three to six months of living expenses saved in an easily accessible account so you can stay afloat in case of a change in your employment, natural disasters or any other unexpected event life throws your way.

4. Realign with your long-term goals.

Whether you made large strides toward your long-term goals or had to put them on hold due to unforeseeable events this past year, the new year is a great time to refocus on your goals. Go through each of your goals to see where you’re at, then put a plan in place to make sure you’re on the right track to achieving them in alignment with your set timeline. Be sure to also check your retirement account to make sure you’re set up to retire when and how you want.  

By checking in and knowing exactly where you are with your budget, debt, emergency fund and long-term financial goals and creating a plan to ensure they are all on the right track, you’ll set yourself up for financial success in the new year.