Cleaning Up Your Finances in the New Year
“The beginning is always today.”
– Mary Wollstonecraft Shelley
As we approach the New Year, many of us take some time to set resolutions.
I like to call them goals, but frankly any time we can think about growth I think it is a good thing!
Why not take the time to do a check up on your financial health? Here are some great places to get started.
Check Your Credit Report
When it comes to cleaning up your finances in the new year, it pays to know where you stand. Your credit report is the perfect place to start.
You are entitled to one free credit report every year under federal law. If you go to Annual Credit Report.com, you can get your report sent straight to you at no charge and no negative impact on your credit score.
Once you have the report, be sure to check it for accuracy. If everything is in order, start by reviewing your debts to determine which accounts you should put more effort into paying down this year.
If your credit report could use some love, make it a priority this year to get your credit profile back on track.
Look At Where You Are, And Where You’re Going
Take a closer look at your financial goals and budgeting. Is your current savings level high enough to meet these goals?
If the answer is no, it’s time to think about trade-offs. Maybe you decide to skip going out on Friday nights, or stay home with Netflix instead of going to the movie theater. Whatever it is, figure out what you need to do to get your budget back on track.
Now can be the perfect time to re-evaluate your financial destination, because if you don’t know where you’re going, then you won’t know how to get there!
Examine Your Insurance
Insurance is gambling against your own bad luck, because sooner or later, you’re going to need it.
But that doesn’t mean you should pay more for it than you have to!
Whether it’s your health insurance or your auto policy, scrutinize all of the policies you own and decide if they still work for you. Maybe you can afford a higher deductible that comes with lower premiums? Maybe your life insurance policy no longer matches your stage of life? Take some time to sit down and figure it out.
Don’t forget that if you have traded automobiles or built an addition to your home, you may need to update your agent so they can note the change in your umbrella policy.
Whatever changes you make to your insurance coverage, the beginning of the year is an excellent time to make them.
Put Your Money To Work
If you have extra cash sitting around, then now is a good time to come up with an investment strategy.
Start with retirement accounts like an IRA or 401(k). These allow your savings to grow tax-deferred until the funds are withdrawn. There are income and contribution limitations to be aware of, but when used correctly, these accounts can help put your money to work for you.
If you have too much of your long-term portfolio in cash, consider developing a strategy to get it into more suitable investments.
“What a wonderful thought it is that some of the best days of our lives haven’t even happened yet.”
– Anne Frank
Improving your financial health is one of the best goals you can ever set, and there is no better time to start than the present. Here’s to a happy new year!
Are you Financial Adviser Compatible? Take the QUIZ here to find out. Byron W. Ellis, CFP®, CLU®, ChFC®, CRPC®, is a CERTIFIED FINANCIAL PLANNER™ professional and Managing Director with United Capital Financial Advisers, LLC, a Financial Life Management firm. The information contained in this article is intended for information only is not a recommendation, and should not be considered investment advice. Please contact your financial adviser with questions about your specific needs and circumstances
© Byron Ellis
Originally published at doingmoneyright.com on January 8, 2019.