A new year has dawned, and you’re looking to make some new resolutions. One popular area that people usually focus on is financial welfare. Perhaps because they are looking to be financially stable or improve their status. Nonetheless, financial decisions are important and need to be made often. Below are moves that you can consider this January.
1. Increase Retirement Savings
No matter your age, retirement savings are essential for setting up a successful retirement plan. Consider increasing your retirement account contributions that consequently will get you extra tax deductions. Your finances may be tight, but see how you can increase retirement savings and reduce your taxable income. Furthermore, it may concurrently help you to meet your future financial objectives.
2. Review Your Budget
Reviewing your budget is something that you should frequently do. However, it can be vital to tweak it at the start of a new year as it is a good time to analyze your expenses and discover what worked well and what didn’t during the last 12 months. You can improve upon or carry on with the decisions in your budget that worked. Similarly, you should drop those that failed. Your analysis will enable you to determine and structure your budget the best way you see fit.
3. Improve Your Credit Score
A good credit score makes you viable to exploit a wide range of opportunities that may come your way. Improving your credit score is amongst the best financial decisions that you can make, not only as the year begins, but also at any point in your life. Pay your bills timely and avoid taking more credit to improve your credit score. While this may not be beneficial instantly, you will be building a base for future financial success.
4. Utilize Investment Losses
Another wise move to make is taking advantage of investment losses. If you have investment portfolios that are performing poorly, trade them at a loss and use the fund to offset capital gains from other investments that you have. Additionally, this will help you reduce the taxes that you pay on your investment profits.
5. Set up an Emergency Fund
Lastly, set up an emergency fund in case you don’t have one. If you already have one then try and increase it because the older you get, the more financial needs you’ll have. An emergency fund can bail you out in tough times, especially during family problems or if you happen to lose your job. Normally, people spend a lot during economic expansions and only think of saving when the economic tide is contracting. Setting some funds aside to cater for unexpected expenses is a good financial move.
Everyone has different life and personal objectives. Therefore, decide on what is more important to you and what you intend to achieve as the New Year begins. Consider your ambitions, current status, and family when making financial decisions. Contemplate the idea of professional advice to help you shape your financial goals.
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