The New Year is always a good time to set some goals – especially when it comes to your finances. Bob Wamhoff, president of Wamhoff Financial Planning & Accounting, provides the following list of the top financial do’s and don’ts for 2014:
1. DO – Increase Your 401(k) Contribution
- Are you “saving until it hurts?” Be honest. You probably have more room to save and increasing your 401(k) contribution each year is a great way to do it.
- 401(k) is deducted pre-tax, and chances are you won’t miss it much.
- If you have an employer match, you’re increasing your retirement savings even more.
2. DO – Carefully Evaluate What to Do with your Year-End Bonus
- If you have high interest debt (i.e. credit card debt), pay this down.
- Put it into your IRA or make a one-time contribution to your 401(k) before the end of the year.
- Most have already spent their year end bonus but remember, if you don’t have any money saved at the end of the year then you worked all year to simply sustain and not to grow. So, plan now for how you’re going to save in 2014!
3. DO – Review Your Insurance and Savings
- Has your situation changed over the course of the past year, and is your life insurance and medical insurance appropriate for what you need today?
- Look at your college savings plans, medical savings and cafeteria plans. Were they adequate this past year, and are there adjustments (either up or down) that you need to make?
4. DON’T – Overspend and Get into Debt
- We talk a lot about creating a budget for your household, monitoring and sticking to it. This will help you manage spending.
- Avoid “bad debt,” such as credit cards and other high interest loans. Your home mortgage (assuming you have a good interest rate) isn’t bad debt.