4 Financial New Year’s Resolutions Worth Setting
As the holiday season ends, many people want to know how to get back on track with their financial goals. Setting New Year’s resolutions can help you start the year off right! Consider these four goals to set for next year.
1. Save More Money
One of the top financial goals people set each year is saving more money. However, with such a broad goal, it’s often helpful to look at concrete ways you can save money to help ensure you can stick to it. Ideas for saving money include:
- Cut back on unnecessary spending, including during the holidays.
- Raise your 401(k) contributions.
- Start automatic transfers to a high-yield savings account.
- Use a credit card that offers rewards like cash back, miles and points.
2. Pay Off Credit Card Debt
Many individuals have credit card debt they need to pay off. The new year is a great time to get started, and a couple of ways you can go about reducing and eventually paying off your credit card debt are:
- Consolidating debt onto a balance transfer credit card with no interest for up to 21 months.
- Adding credit card debt payments into your budget, including allotting extra money toward payments.
3. Improve Your Credit Score
You can take some simple steps to improve your credit score in the new year. If you have a credit score below 700, making this goal one of your priorities can be highly beneficial. You can raise your credit score by:
- Paying down debt.
- Paying bills in full on time.
- Reducing spending.
- Limiting the number of new accounts you open.
4. Create a New Year Budget for Personal Expenses
Budgeting helps you know where you spend your money and sets guidelines to improve how you’re using it. To start creating a budget, write down all the fixed expenses you have each month. These could include:
- Cell phone bill
- Rent or mortgage payment
- Utility bills
Anything on this list is what you need to live your lifestyle. The money you have left over after these expenses is for flexible spending. You can use that money for items you want, such as clothing, eating at restaurants, or entertainment activities.
Examine your credit and bank statements to see all your purchases. You can section off percentages so you know how much of each paycheck or other payments you receive goes where and can keep a running tally.
How to Keep Your Financial Resolutions
Setting financial resolutions is one thing, but sticking to them is entirely different. With financials, it’s crucial to follow any suggested guidelines to make it easier to stick to your plan. These ideas can include:
- Taking advantage of year-end bonuses: Set aside the money you earn with a year-end bonus for your savings or bills.
- Using tax-loss selling: You can minimize the taxes you pay to improve your after-tax return on investment portfolios. Sell investments that go down and take the loss to offset capital gains from the previous year.
- Doing a Roth conversion: Older IRA owners can consider completing a Roth conversion with some IRA money. Roth IRAs let you pay taxes on the money you contribute, but then withdrawals are tax-free.
- Start with small goals: While many goals are outlined above, you can pick the most important ones to work on this year. Having four significant goals is a lot, especially when they can be complex. Instead, setting more attainable goals, such as “I want to save X dollars to my savings account by the end of the year” or “I want to have my credit card debt paid down to half by June,” can help you stay on track without getting overwhelmed.
- Staying consistent: Consistency is the key to any New Year’s resolution. Develop a plan and stick to it — savings, paying off debt, monitoring credit cards, or whatever else you choose. Whatever you do, try to develop your financial resolutions into a habit.
- Asking for help: Work with a financial advisor or mentor to hold yourself accountable. Having the right team to help you determine the right goals to set and work with you on achieving them is beneficial and keeps you on track.
- Being flexible: Remember that while selecting a timeline and tracking your progress is crucial, you may sometimes have to readjust. Building flexibility into your goals allows you to accommodate your needs while still making progress.
Team up With Fort Pitt Capital Group for Your New Year Financial Goals
If you are thinking about financial New Year’s resolutions and want assistance, Fort Pitt Capital Group is ready to help. We take pride in providing exceptional client service and highly-valued transparency. We ensure your investment and financial strategies fit your needs, no matter what those might be.