8 Personal finance New Year's resolutions you should copy


By Tiffany Alexy, personal finance writer

With 2017 finally here, it’s time to wrangle up your New Year’s resolutions and prepare for the year ahead. For many Americans, the start of a new year provides a blank slate for new goals - many of them financial in nature. Although I may be biased, I believe keeping financial goals at the forefront of your mind is the key to success in all endeavors.

If you're struggling for inspiration, here are a few financial New Year’s resolutions to copy when making your list. While not all may apply to you, having at least a few financial resolutions will put you in the right frame of mind for becoming more fiscally fit.

1. Create a budget.


Having a budget is crucial to understanding the money flow you experience every month. If you are just starting off and have never created a budget before, make sure you also allocate enough money to irregular and/or big ticket items. This includes things like home repairs/upgrades (if you own your home), taxes, vacations, etc. Also, be sure to include a savings category if you plan on achieving certain savings targets such as contributing to retirement accounts.

If you don’t already keep a budget, keep in mind when starting out not to be too critical. You will more than likely see a few surprises when you start tallying up your monthly spending. Do not judge or look down on yourself because of your spending. What is important is recognizing certain spending patterns so you can better manage them in the future.

2. Pay down debt!


For many who are recently out of school (or even for some who are not), student loans and credit card debt are a heavy burden to bear - not just financially, but psychologically. The great part is, while you have a minimum payment, there is no maximum payment. So you can (and should, if you’re able to) throw extra money toward paying off those debts.

Depending on the interest rate of your loan, it is equivalent to investing the same money at a guaranteed rate - which is not too commonly found, might I add.

If you need any more motivation, plan a debt payoff party or allow yourself a treat once you pay off the debt. It will help create a positive focus while working toward something you want, versus feeling like you’re stuck in a never-ending debt cycle.

3. Save for a rainy day


If you’re a homeowner and/or have a family, there will always be unexpected expenses that you will be expected to cover. Things break and children get sick. If you are not financially prepared, this can spell financial ruin. The best way to combat this is to build up a sizeable amount of savings (enough to cover 3-6 months of living expenses in case of job loss). Having this money readily accessible at all times will provide huge peace of mind. Just make sure only to dip into it in cases of true emergencies.

4. Max out retirement accounts


If you’re able, contributing the max to any employer-sponsored retirement accounts is a great financial goal to have. In 2017, the 401(k) contribution limit is $18,000 with an additional $6,000 catch-up contribution allowed for anyone over the age of 50. In addition, the IRA contribution limit for 2017 is $5,500 (or $6,500 if you’re over 50). These offer great opportunities to set aside pre-tax money toward investing goals, especially if your employer offers matching contributions.

Depending on your type of work and your employer, you may have even more retirement investing options available, such as a health savings account (HSA), 403(b), etc. Take advantage of as many as you feasibly can!

5. Get a side gig


Side jobs are a great way to earn extra income that you can then divert toward debt pay down or savings goals. There are so many opportunities out there to earn money that you just need to hone in on what you are good at and what you enjoy doing.

For example, dog sitting is a great side gig. Sites like Rover.com match potential dog sitters with those needing dog sitting services. Sitters have their own profiles and can set their own rates. For anyone who is a dog lover and lives in a residence that allows pets, this is a no brainer!

The key is to do something that offers a return on your time invested and that is flexible around your full-time job.

6. Purchase an investment property


Many believe real estate is the ticket to wealth. While owning investment properties comes with a slew of financial benefits, the most daunting part for many people is coming up with the initial down payment for that first property. Most lenders require at least 20% down for an investment property loan. Even if it is a relatively modest property at $100,000 -- that’s $20,000 you have to come up with, which is not pocket change.

However, working toward saving up for your first investment property -- if you do indeed decide to pursue the investment property path -- can be a great financial Resolution. If you buy correctly and the numbers make sense, real estate is a great way to compound your wealth.

7. Ask for a raise


This is potentially one of the toughest resolutions to keep, since it usually involves a superior at your company. If you’ve been at your job for a while and have been performing well, asking for a raise should be a priority.

Another more gutsy option (for those who are braver) is to interview at another company and see if they can give you a better offer than what you’re currently making. If your company wants to keep you, they should at least match that offer. However, if you do pursue this route, make sure you are prepared to leave your current company if they refuse to match the offer. This can be a tricky situation to manage, but if you can pull it off, it will allow you to grow your income quickly.

8. Contribute to your child’s 529


For those with children, paying for college is always a huge worry, especially with college costs rising. Even if you’re starting small, contributing a few hundred dollars per month to a college savings plan can really add up over time. If you’re not sure whether your child will attend college (it’s not for everyone, after all), it might be a good time to look into different account options, just to be safe.

Written on January 5, 2017

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