If you failed to previously achieve your financial resolutions for the New Year, you're not alone. According to the Journal of Clinical Psychology by the University of Scranton, a mere 8% of people actually achieve their resolutions for the New Year.
However, this doesn't mean you can't refocus, rehone, and reinvigorate your financial resolutions for the New Year. The following information explains a few achievable and attainable financial New Year's resolutions everyone should subscribe to.
If you don't know your net worth, the New Year is the perfect time to determine it. Calculating your net worth is one of the key steps toward examining your financial health and achieving your financial goals.
Start by closely looking at your liabilities and assets, which will provide a clear picture of where you're spending your money. It will also highlight where you should make changes in your saving and spending habits.
As one of the top financial resolutions for the New Year, it's a good practice to track your net worth every year to chart your progress. This will also present a great opportunity to correct mistakes before they turn into overwhelming debts. Once you calculate your net worth, the other financial resolutions for the New Year you should make will become more obvious.
While having easy access to your funds may be tempting, most people will spend money they can easily attain. As a result, it's best to house a savings account that isn't easily accessible. One of the key financial New Year's resolutions is to update your savings goals, which could include an education fund for the children, adding to your retirement nest egg, or planning a down payment on a new home.
At the same time, make a financial New Year's resolution to reset your debt, which may equate to paying additional principal toward the mortgage. When you do this, you will gain risk-free return on money equal to the interest rate on your mortgage. Most importantly, it will allow you to reduce the number of years it will take to pay off the mortgage.
If you must decide between paying additional money on your mortgage or adding to your retirement, you may find supreme benefit in speaking to an experienced financial advisor or accountant.
Since your credit can impact virtually every aspect of your life, it's imperative you make the financial New Year's resolution to review your credit report. Make sure to look for errors because credit report errors are not uncommon.
If you notice any inconsistencies or negative aspects, take the proper steps to repair them. A poor credit score could adversely affect your ability to save. It can also result in you paying higher interest rates on borrowed money, which reduces your disposable income.
There are a number of sites, books, and financial professionals that will offer immense insight into the financial industry and it's ever-evolving nature. If you don't already have a financial advisor or accountant, now would be a great time to consider consulting with one.
An accountant will provide you with a deeper insight into your investment accounts and various other financial matters. Once you choose an accountant, make sure to communicate your financial goals and ask questions about topics that interest you.
If you owe money on your credit cards, the first step is to determine the amount you can realistically afford to pay down during the year. During this paydown period, it's best to avoid making additional purchases.
If you have credit cards with high interest rates, you may be eligible to transfer the balances to special introductory 0% credit cards. Regardless of the strategy you use, it makes dollars and sense to choose a skilled accountant or financial professional to guide you in the process.
As you progress through your career, your disability and life insurance needs will continually change. The New Year is an excellent time to consider how much protection you need and compare it to your current coverages offered through your employer.
Consider if you should have less or more life insurance. You should consider if your family's needs will be satisfied by permanent or term life insurance. Make sure to analyze your coverages for disability insurance to ensure you have sufficient coverage.
In the process of making financial resolutions for the New Year, be cautious about setting unrealistic or too many financial goals. If you do, you may be unable to accomplish any of them. However, the accountants and financial experts at Dennehy CPA bring decades of experience helping businesses and consumers get into better financial shape. Whether it's financial resolutions for the New Year or business tax planning, we will help you achieve your goals.
Contact Dennehy CPA today to schedule an appointment for a financial checkup.