7 Financial New Year’s Resolutions
At the start of each New Year, many people make resolutions and vow to stick to them. Some say that they will exercise more frequently or focus on dieting, but what about improving one’s finances? Team AICPA brainstormed some financial New Year’s resolutions to help you meet your 2016 financial goals:
1. Set an achievable budget for the year. Start by reviewing your expenses from last year. Were some of your targeted figures unrealistic? Are there areas where you can cut back? If you’ve never had a budget, now’s the time to make one.
2. Take a deep breath if your December credit card bill is higher than your monthly average. With all of the holiday shopping for family and friends, extravagant parties and meals at restaurants, a larger balance is typical. Remember to reflect on the enjoyment gained from these activities and take the time to plan your upcoming monthly budgets so that you are back on track for the rest of the year. If you really got yourself into an unfortunate financial situation, take time to assess how it happened and address the underlying issues that led you to overspend. Use the 360 Degrees of Financial Literacy credit card pay off calculator to figure out how best to get back on track.
4. Purchase products when they are on sale. Instead of buying tissues during cold and flu season, stock up when they are “buy one get one free”. Or purchase a winter coat during the spring and summer months when they are in less demand and likely less costly.
5. Reflect on your retirement contributions. A general rule of thumb is to set aside 10% of your annual income for retirement. The earlier you start saving, even if just a small amount at first, the better off you’ll be. If you start saving in your later years, you may want to increase your savings to ensure that you have sufficient funds for a comfortable retirement. Use the 360 Degrees of Financial Literacy retirement planner calculator to determine a savings plan that works for you.
6. Get fit in 2016. Before you run out and sign up for a new gym membership, consult your employer or health insurance company to see if they offer any reimbursements.
7. Evaluate whether renting or owning is a more affordable option. In many markets, buying a home is a worthwhile investment that pays off in the long run. For homeowners, as soon as the mortgage is paid off, the property becomes your own, whereas renting only benefits your landlord. To find out what income is required to qualify for a mortgage, check out the 360 Degrees of Financial Literacy mortgage calculator.
For more financial literacy tips and valuable resources, visit the 360 Degrees of Financial Literacy website. What are your financial New Year’s resolutions? We would love to hear from you in the comments section below.
Alexis Rothberg, Communications Specialist, American Institute of CPAs.
Lunch image courtesy of Shutterstock.