When it comes to New Year’s resolution, those vowing to get in fiscal shape actually do pretty well, research shows.
“According to a 2015 Fidelity survey, 29 percent of those people who made money-related resolutions at the start of 2014 actually achieved their goals, while 74 percent got at least halfway there. What’s more, half believed they were better off financially,”
Forbes.com contributor Kate Ashford explains.
Highlighting five tips she offered for the new year:
- Start a budget.
“It’s very important for people to understand where their money is going,” says Howard Pressman, a financial planner in Vienna, VA. “The problem is that many people don’t like what the results are, as they realize how much money they’re wasting on odd things.”
- Shore up your rainy day cushion.
“Nearly 30 percent of people in the U.S. have no emergency savings, according to a Bankrate survey, and many of those who do simply don’t have enough. Financial experts recommend having enough cash in the bank to cover three to six months of living expenses—basically, everything you’d have to pay for in cash, after taxes, each month. At the very least, aim for $1,000 in a liquid account.”
- Make a plan for tackling debt.
“Researchers from Northwestern University’s Kellogg School of Management found that you’re more likely to pay down your overall debt when you tackle the smallest balances first because those small “victories” keep you motivated to keep going,” she wrote. “Paying your consumer debt down is a return,” says Wes Brown, a financial planner in Knoxville, TN. “Letting it linger can hurt your credit and hamper you from being able to do other things.”
- Calculate your retirement number.
Less than half of U.S. workers say they or their spouses have run the numbers to determine how much they’ll need to save to live comfortably in retirement, according to a survey from the Employee Benefit Research Institute. Fidelity recommends saving eight times your salary before you retire to meet basic income needs—aiming for twice your salary by age 40 (example: If you make $40,000 a year, shoot for $80,000), four times your salary by 50, and six times your salary by age 60.
- Find out your credit score.
Those three little numbers matter—a lot. A solid credit score means you’ll pay less interest on loans for a mortgage, a car or college. These tips can help boost your digits: Pay your bills on time, keep your overall credit card balance to less than 30 percent of your total available credit, and don’t close your oldest accounts (it will shorten your credit history).
To be sure, ‘tis the season to get financial affair in order, USNews explains.
“The end of the year presents a good opportunity to review your financial portfolio and determine whether your asset allocation is still appropriate. It’s normal to have some anxiety during this process, especially after a year as volatile as the last one. During times of volatility, we remind clients to remain focused on their long-term goals,” explains Masood Vojdani, a blogger for The Smarter Investor.
“Investors need to remember that making drastic changes to a portfolio during times of volatility is risky and can result in locking in losses. Instead, investors should ride out the volatility whenever possible. Through our research on markets and economic conditions, we are selecting equity opportunities that are likely to be resilient in 2016 and beyond.”
Aside from reviewing your investment options, he urges you to review your retirement strategy and your estate planning.
“It’s important to regularly evaluate your retirement plans and consider reallocating investments or increasing contributions,” he said.
“It’s never pleasant to talk about estate planning, but these conversations are important to have. Many people falsely believe that a will is a “set it and forget it” type of document, but that is unfortunately not the case,” he said.
“It’s important to review wills and other estate planning documents periodically and identify any changes related to your health, finances and relationships. Any new marriages, children or grandchildren that were added last year should be documented.”
Source : Newsmax.com