Top Money Resolutions for the New Year

The start of 2019 means it’s time to set goals and make plans for the upcoming year. Financial resolutions are some of the most popular, but they can be hard to follow up on when they’re too general.

The best way to make progress is to identify specific things you will do to improve your financial situation in the next 12 months. Here’s a list of ideas to help you get started.

Learn about tax reform.
The Tax Cuts and Jobs Act took effect in 2018 and will probably change how you file your tax return in 2019. For example, the standard deduction has been raised but the personal exemption for dependent children has been eliminated. Whether you have your taxes professionally prepared or do them yourself, it’s important to understand how tax reform will impact your personal situation.

Identify long-term goals.
We all need something to work toward, whether it’s a long-wanted designer bag, a car or a house. Everyone also needs to think about retirement. Identify your long-term goals and what you can do to reach them in 2019. Keeping the future in mind can help keep your spending on track.

Save off the top.
Sporadic contributions to a savings account won’t help your savings grow quickly over time, especially if you frequently drain it. Pick a specific amount, such as 15 percent of your paycheck, and have it automatically transferred to savings every pay period. Then do your best to leave the money in place for real emergencies. If your employer offers a 401(k), sign up to contribute as much as you can up to the maximum. At the very least, put in enough each month to qualify for matching funds from your employer.

Track your expenses.
Many dieters find weight loss success when they start tracking their calorie intake. The same can be true of spending. Knowing where your money goes is the first step toward gaining control over your spending. There are plenty of tools out there to help you, from Excel spreadsheets to apps such as QuickBooks or Mint. You can even use paper and pencil; the choice is individual. The important thing is to consistently track your spending on a daily basis.

Attack your debt.
If you have student loans or credit card debt, why not make this the year that you create a plan to pay it off? Begin by listing how much you owe in total, along with the interest rate for each loan or credit card. This can be an eye-opening experience, especially if you’ve fallen into the habit of paying only the minimum each month. Next, get rid of as many high-interest debts as possible though balance transfers and loan consolidation. Then commit to a plan to pay the debt down as soon as possible, without incurring more debt.

Cut down on money drains.
All of us can probably identify areas in our budgets where we’re wasting money. The gym membership you rarely use may only cost a $40 per month, but it adds up to $480 per year that could be going toward savings or debt. Look at memberships, subscriptions and other services and cancel them if they’re not worth the expense or you’re not using them. Switch to credit cards with no annual fees and bank accounts without monthly service charges.

Find support.
According to a 2016 survey conducted by online financial service provider LearnVest, 74 percent of Americans agree that discussing financial resolutions with others makes them more likely to stay on track. Even though bringing up personal finances with family and friends might be awkward, greater transparency about our financial goals can make it easier to stay committed. Also, sharing your financial goals with a supportive friend can help you feel enthusiastic as you work toward it.

Protect your estate.
You’ve worked hard for what you have, so it makes sense to spend some time protecting your estate from excessive taxes or attorney fees. Review the beneficiaries on your investment and life insurance accounts. If you don’t have a will or living trust but have assets you want to pass on to family, friends or charity, then make this the year you have one prepared. Make sure you gather all estate-related documents in a safe location and give copies to a trusted family member or close friend.

The best financial resolution you can make for 2019 is to set some manageable goals and commit to meeting them. Whether you focus on paying down debt or building an emergency savings fund, your chances of succeeding will increase if you have a plan with measurable milestones throughout the year. Celebrate the milestones you hit and remember that personal financial management is an ongoing process. ■

Sources: forbes.com, schwab.com, fidelity.com and learnvest.com.