Financial Do’s and Don’ts for the 2018 New Year

To-do list spiral notebook pencil, mobile phone and cup of coffee on tableWith each new year comes the perfect opportunity to reflect on you’re the progress of your financial life and create actionable goals for the 12 months ahead. While most people focus on saving more money or paying down debt as a new year’s resolution, others may place importance of shifting behaviors around money management in an attempt to improve one’s financial circumstances. Regardless of whether your new year’s financial resolutions revolve around the dollars and cents, or on changing your money habits, here are several financial do’s and don’ts you may want to consider implementing, or avoiding, this new year.

Financial Do: Save for the Long-term

The new year is a great time to check in with your long-term savings goals, specifically for retirement. Setting up paycheck deferrals to your employer’s retirement plan, if one is available, is one of the simplest ways to shore up a nest egg for the future. If you don’t have an employer-sponsored retirement plan available, talk to a financial professional to determine your best options for saving for this lofty goal.

Financial Don’t: Get Caught up in the Hype

Each year, new trends come and go, from exciting new investment opportunities to enhanced methods to save or earn money. While these alluring options can seem lucrative on the surface, they may come with risks you aren’t willing to take. Spend some time learning about new strategies to enhance your financial picture – instead of getting caught up in the hype.

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Financial Do: Plan for Big Expenses

The foundation of sound money management is spending less than you earn, which most people are capable of doing with day to day expenses fairly easily. What some individuals overlook are the big ticket items that derail an otherwise solid plan. At the beginning of the year, look into your crystal ball and determine what large expenses may be around the corner, and set up dedicated savings to help offset these bills before they become due.

Financial Don’t: Avoiding the Budget

Piggybacking on the spending less than you earn mantra, it is critical to have a budget established if you want to feel more financially fit in the new year. Find a system that works best for you, and stick with it throughout the year. If you find you’re spending more than what you’re bringing in, revisit your budget and make adjustments as needed. A budget should be a fluid tool that ebbs and flows with you and your finances, not a rigid system that stays stagnant.

Financial Do: Check Your Credit

Most people think of increasing their net worth as a top priority for financial resolutions, but having a strong understanding of your financial track record via your credit history and score is also a necessary part of being financially well. Each year, you have the opportunity to pull your credit reports from each of the three major credit bureaus, for free. Take the time to do so, and work on boosting your credit profile as you are able.

Financial Don’t: Take on Unnecessary Debt

Consumer debt has the potential to derail any sound financial plan, especially when it is used without giving it much thought. Get a handle on what you owe and to whom, and create a plan that fits your budget to pay debts off. Before taking on new debt, consider your ability to delay a big purchase until you’ve saved enough to cover the expense out of pocket. If you truly need that new credit card or loan, come up with a strategy for paying it off quickly while working toward your other goals as well.

The new year marks a fresh start for many, particularly in the area of personal finances. Take this opportunity to tackle some of the financial do’s while avoiding the financial don’ts to make the new 12 months the best they can be for your financial well-being.

Posted on January 11, 2018 by in Personal Finance

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