Financial New Year’s Resolutions :: Wamhoff Financial & Accounting


Financial New Year’s Resolutions

2016 is just around the corner, and that means you’re probably making your New Year’s Resolutions. Bob Wamhoff, President of Wamhoff Financial Planning & Accounting Services, outlines the financial resolutions to consider for the new year.

401k

  • If you’re not doing so already, contribute enough to at least get the employer match, if offered.
  • Raise your level of savings. Try to increase by 1% each year, or contribute some of your year-end bonus to your 401k.
  • If you have an old 401k plan, do not forget to roll it over into an IRA on into your new 401k plan at your new employer.

Debt

  • Consider a target amount that you would like to pay off throughout the coming year. Be specific. For example, set a goal of putting $200 each month towards paying your debt instead of just saying “I want to pay off my debt.”
  • Make a list of all debts and prioritize which debts to pay off first depending on balance, interest rate, etc.1

Budget

  • Create an emergency fund – general rule of thumb is 3-6 months salary.
  • Compile a list of fixed expenses that you know will come every month (mortgage, utilities, food, etc.) and determine an amount that can be allocated to pay off debt.
  • Categorize your monthly expenses and evaluate where changes need to be made if necessary to lower your monthly expenses2.
  • Consider using free platforms such as Minto.com to track spending, income, and help in creating a proper budget.

Banking

  • Evaluate your credit card company and/or bank. Are there other companies that offer better rewards, lower fees, increased protection, etc.?
  • Consider setting up direct deposit to allocate a certain amount of your paycheck to a savings account. This can be used for emergency funds, vacation, or other financial goals (“out of sight, out of mind”)3.
  • Use cash for smaller purchases. Studies have shown that people spend less when they use cash over credit.

Sources:
1 http://www.sndebtsolutions.com/new-years-resolution-to-get-out-of-debt/
2 https://www.mint.com/budgeting-3/how-to-create-a-new-years-budget-that-sticks
3 http://business.time.com/2011/12/30/5-banking-new-years-resolutions/