The new year represents a great time to assess your finances and create a plan for setting and meeting your financial goals. Here are three financial resolutions that can make the new year a prosperous one.
1. Create a Budget
- Review your net income and expenses. Identify any expenses that could be adjusted or even eliminated without major consequences to your lifestyle.
- Removing costly habits from your budget, such as an expensive daily latte or boutique fresh pastry, will free up funds to help pay down your debt or pay for other necessities.
- Funds should be allocated not only for spending, but also for saving, such as contributing to a retirement account.
- Build an emergency fund into your budget to prepare for unexpected expenses.
- Using a budgeting tool or a spreadsheet can make it easier for you to track your budget.
2. Manage Debt
- Take a close look at your current debt and develop a repayment timeline. Make sure it’s a reasonable timeline and not one that will add a lot of stress to your life.
- Some debt will take longer than others to pay off, but try to eliminate high interest or high cost debts first, when possible.
3. Review Your Investments
- It’s always a good idea to review your investment portfolio on a regular basis. You don’t want to be on autopilot, especially when we see many changes to the economy.
- Reassess your short- and long-term investment goals and make adjustments when necessary.
The new year is a great time to sit down and create a financial plan, but you also need to make sure to review your goals throughout the year to make sure you are on the right path to meeting those goals.
If you ever have questions concerning new tax laws, liabilities, or benefits for the coming year, you can always give Root Tax a call, and we will give you the answers you need.
Happy New Year!
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