The new year is a great time to review your financial situation, choose goals, and build a plan to help you get there. In addition to reviewing your budget and creating a plan to lower your debt, there are several steps you should take that can help you reach your financial goals this year and in the years to come.
Set Your Goals
Most of us are so busy we don't take the time to sit down and think about our longer term financial goals, but it's an essential first step. Maybe you want to save for your children's education, make sure you have enough saved for retirement, get out of debt, or buy a car or home. If you're not sure where to start, there are goal-setting worksheets online that can help.
Get a Snapshot of Your Financial Situation
Every 12 months, federal law allows you to get a free copy of your credit report from all three national credit reporting companies. It's smart to review all three reports, because the information can vary from company to company. If you find errors, you can get them corrected, which could improve your creditworthiness. Knowing your credit history is especially important if you're planning to buy a home or car or take out a loan, because your history and credit score may affect your ability to borrow and the interest rate you'll pay.
Be a Regular Saver
While saving money can be tough when your budget is tight, it's an important goal to commit to. You should work on building an emergency fund so you have easily accessible cash to pay your bills if you lose your job or miss work for a long period because you're sick or injured. You can make saving easier if you set up automatic transfers to your savings account every time you get paid.
Give Your Accounts a Check-Up
Now is a good time to review your insurance, bank and credit card accounts, retirement plans, and other accounts. Shop around to see if you're getting the best interest rates, lowest fees, and widest range of benefits. For bank and retirement accounts, your will, and life insurance, also review your beneficiaries and make sure they're up to date.
Find a Better Deal
You could save a good deal of money by checking to make sure you're getting the best deal on services like cable, cell phone, home security, home phone, gym memberships and more, so check what other providers are offering. Some services charge a penalty for ending your contract early, so factor that into your decision.
Put together a notebook or computer document that lists all your accounts, their account numbers, contact information, and other pertinent information. This way, if you or your partner need to take on handling aspects of the family finances you don't usually deal with, you'll have all the information you need.
Prepare for Retirement (Even if You're Only 30)
The earlier you start saving for retirement, the longer your money has to grow. Use an online calculator to figure out how much money you'll need, then figure how much you should put into your work-sponsored or individual retirement account each paycheck to reach that goal.