Submitted by Brian Frederick, CFP®, CIMA®, January 10, 2018
Nearly half of all Americans make a New Year’s resolution.
Did you make one?
Do any of these sound familiar?
Nearly 1 in 5 people resolve to losing weight or eating healthier, 1 in 8 are making life/self-improvements, and 1 in 12 want to make better financial decisions. Hopefully, you are not one of the 25% of the people who have already given up on your resolutions in the first few weeks of 2018. While I am not qualified to help much on the losing weight or being healthier front, I do have a few ideas on the finances that can be shared with anyone.
Regardless of your progress, it is good to know that even small changes can have a lasting effect, particularly in your finances.
Here are three simple strategies to consider to help kick start the new year.
- Spend less than you make. This is obvious, but so hard to do. In fact, it is estimated that most people “waste” 10% of their income every month. Putting the time and effort in to see where your money is going and how is being spent is not fun, but ultimately can be rewarding as your resources grow.
- Pay yourself first. My dad always told me that and mentioned that if I was not willing to do that then why should anyone else? Increase your monthly savings amount. Put it in the bank, your retirement plan at work, your Roth IRA, your kids 529 plan, to name a few options. Where exactly depends on your situation, but start now.
- Save more for retirement. There are many surveys out there that indicate Americans are not taking advantage of their company’s retirement plan. One such survey by Bloomberg News stated that only 41% of Americans were saving in their plan. You are leaving money on the table by not contributing and getting the benefits of the company match (if available) and the tax savings. Get as much free money as you can by “maxing the company match.”
While these are simple tips, they are not easy. Just like our New Year’s resolutions, we want to make some changes, but not all of us follow through on our good intentions. These basic things can be taken for granted and easily forgotten. Help your friends and family, or yourself, by taking steps toward being one of the success stories for the New Year.
Sources: ©2016, www.proactivechange.com; Statistic Brain Research Institute, ©2017, https://www.statisticbrain.com/new-years-resolution-statistics/