The more you’ve got to use your possession, the more possible you’re to revert to your previous unhealthy habits after some weeks.
So how can you keep on with your vows to save? By making simply 5 decisions, and putt automatic systems in place so that no further effort is required.
While the highest two resolutions of “save more” and “spend less” seem pretty simple, they are easier said than done.
“Give yourself a chance to succeed by ensuring the goals are meaningful, specific and actionable,” said Neil Krishnaswamy, a certified financial planner at Exencial Wealth Advisors in texas. “And set deadlines.”
Here are 5 tips for your financial resolution 2021 from the expert :
- Pay off debt
With the Federal Reserve System raising interest rates for the first time in nearly a decade, 2016 is the year to plan to reducing consumer debt.
Many credit card interest rates are variable, which implies the annual percentage rate (APR) can possible rise as the central bank continues to raise rates.
“Those debts are getting to get more and more expensive as rates rise,” said christopher Krell, a licensed financial planner at Cassaday and Company.
If you’ve got many outstanding debts, he suggested prioritizing in order of highest to lowest interest rates when making payments.
- Produce an emergency fund
Part of the “saving more” resolution should include putting money aside to cover unexpected expenses or to help make ends meets in the event of employment loss.
Experts recommend stashing away 3 to 6 months of costs. “Where in this range you fall depends on your personal scenario,” said Stuart Ritter, senior financial planner and vice president of T. Rowe price Investment Services. “If you’re single and/or at a job that may be more at risk, you would like to be at the higher end of that. If you’re in a dual-income household … you’ll be in the smaller range.”
Be sure to keep the money easily accessible, like a savings or money market account, he added.
- Increase your retirement savings
Experts usually recommend contributing at least 100 percent of your income into retirement accounts.
If you cannot quite swing that much, don’t worry, you do not have to make the leap all at once. “Every 3 months, increase your contributions by 125th to 20,” suggested Kimberly Foss, certified financial planner and founder of Empyrion Wealth Management.
- Assess your investment strategy
It’s also a good idea to begin the year by taking stock of your investments and making sure they align with your goals and risk tolerance.
Make sure you know exactly what you are invested in. even though you chose an asset allocation when you first started investing, you must review and allocate at least once a year to remain on track.
Krell said he recently worked with a couple who thought they were diversified only to comprehend the various mutual funds and ETFs they chose were all invested in the same stocks.
- Review your insurance coverage
If 2015 brought major life changes like wedding, divorce or a child, it is time to assess your insurance plans and beneficiaries.
Life insurance wants tend to increase when there are more dependents on your salary. “Make sure you have got twice your salary,” said Krell.
Also review the beneficiaries of an insurance or retirement plan — they are likely to vary following a marriage or divorce.