The New Year is a time of renewal; the time where we reflect on what went right, but also a time to reflect on what we could have done differently. Fitness and finance are usually the top two categories where people have the most room for improvement and while fitness improvements can be a little straightforward (eat better and exercise), figuring out how to better manage our finances can come with some complexities.
The following are 10 financial resolutions you can make to be financially fit in 2017:
1. Set Clear Financial Goals
If you don’t know where you are going, then it is going to be very difficult to get there. 2017 has to be the year that you say enough is enough. No more just being satisfied with intentions, instead you have to create a plan that will help you execute on your goals. In order to do so, our goals must be clear and concise. It’s not enough to say, “I want to manage my money better this year or I want to start saving more.” Instead, your financial goals should be S.M.A.R.T. (Specific, Measurable, Achievable, Relevant, & Time-bound). So instead of “I will pay down debt,” you will say “I will pay down my debt of $15,000 in 2017 by paying off $625 every two weeks when I get my paycheck.”
2. Begin Using Technology to Better Manage Finances
Using technology to better manage your finances can tell you in a heartbeat whether you are spending too much money on Ubers, or if you can afford to pay off more of your credit card bills. Technology can make it easier for you to invest and grow our money as well. Apps like Mint, Acorn, Digit, and Wealthfront are great places to start.
3. Reduce Your Debt
Reducing debt is a great practice to do all year round, but as you make your resolutions make sure that you put debt reduction high on your list. Not only are there uncertainties with the job market, but you want to reduce the amount of money you owe to other people to assure that you can weather any storm. When you have fewer financial obligations to others, you are far more likely to handle unexpected expenses. Consider snowballing your debt by paying off your lower balance debts until you pay off all.
4. Pay Yourself First
Paying yourself first, which simply means to save money in a high yield savings account prior to paying any bills, is not only a great financial resolution to have, but can also help you achieve many of your clear and concise financial goals (see #1). This also assures that you have a cushion available to take care of your everyday needs in case of a financial emergency. Do this by saving at least 10% of your income every time you get paid.
5. Stop Paying Unnecessary Fees
Whether it is overdraft fees, minimum balance fees, ATM fees, annual fees, etc., one of your financial resolutions should be to rid yourself of paying unnecessary fees. We may not think that $3 here and there is a big deal, but if you add it up throughout the year, it can literally amount to thousands of dollars. Instead of throwing money away, find an account that is totally fee-free.
6. Diversify Your Investments
Investing your money in order to allow it to grow is a great financial strategy. But, if your investments are not diversified, then you can be setting yourself up for a financial disaster, especially since you will have a new president in 2017. According to Kiplingers.com, the stock market has, for the most part, ebbed and flowed when a new president is elected. For the past 182 years, wars, down markets and recessions tend to start in the first two years of a president’s term. So in order to make sure that your investments aren’t susceptible to loss, review them with your financial adviser and diversify as much as possible.
7. Protect Your Assets
We can all agree that we work hard for our money. Instead of leaving your financial security to chance, you must make sure that you are properly protecting your finances. You do this by looking into the right insurance based on your needs. Whether it is rental insurance, homeowners insurance, life insurance, short term/long term disability insurance, or travel insurance, you need to make sure that your assets are protected in the event of an unforeseen emergency.
8. Start Your Side-Hustle
Many of you have been putting your passion projects off for way too long. Let 2017 be the year that you make your side-hustle a reality. Technology has made it convenient for you to start a business successfully without disrupting your current source of income, so make sure you create a plan that will allow your passion to finally bloom.
9. Pay it Forward
The late Muhammad Ali once said, “The service you do for others is the rent you pay for your room here on Earth,” and while you likely have things you would like to improve in your life, you are still very much blessed. A great way to show gratitude for your blessings is to be a blessing to others. This year make a conscious effort to give back to those who are less fortunate. It can be by donating your time to feed the homeless or donating to a good cause. It can even be as simple as anonymously paying for a customer in line. There is magic in being of service and you’ll be surprise how much good will come back to you.
10. Increase Your Financial IQ
Change is the only thing that is certain in life (that and taxes). As change happens you want to make sure that you are keeping up with it. In 2017, increase your financial IQ by reading a new finance or business book each month. One great suggestion is Why Can’t Banks be as Easy as Uber written by yours truly (shameless plug). If books aren’t your thing, then subscribe to a business or finance podcast. If podcasts aren’t your thing either, then make a conscious effort to tune into financial news. There are many innovations happening in the financial industry that can help you manage and grow your money better.
What are your resolutions for 2017? Do you have any plans to overhaul your finances? Tell us in the comments below!
The views and opinions expressed by the author are not necessarily those of BankMobile. The blogs are intended as general financial knowledge that may or may not be applicable to your individual needs. Always contact your accountant for tax advice.
All company/product/service mentions in this post are not intended as an endorsement and the views of that company do not represent the views of BankMobile or Customers Bank.