What Are Your Financial Resolutions for 2017?
It’s that time of year again. A new year is here, which means millions of Americans are setting resolutions for ways to change their lives for the better. According to a study from the University of Scranton, 45 percent of Americans regularly set New Year’s resolutions. Unfortunately, only 8 percent keep those resolutions.1
Many common resolutions include plans to lose weight, quit smoking, get organized or pursue a passion project. This year, however, you may want to make a commitment to take back control of your financial future.
Below are a few ideas for resolutions that could have a big impact on your financial foundation. If you successfully implement even one of these changes, you should see substantial changes in your financial stability. Consider pursuing these financial goals in 2017.
Use a budget.
Only one-third of Americans actively and regularly use a budget.2 That’s unfortunate, because a budget is one of the most powerful financial tools at one’s disposal. It gives you a clear and transparent view into your finances, your income and your spending activity.
Think of a budget as a financial GPS. If you want to reach a certain destination on time, you use a GPS to see what direction to take and how much distance you need to cover. Similarly, a budget tells you how much spending you can afford and where you should make cuts to meet your savings goals.
If you don’t use a budget, consider changing that habit in 2017. Also, be sure to include savings in the budget as a mandatory expense, just like your mortgage, utilities and other bills. If you always pay yourself first, you’ll see your savings balance rise quickly.
Get high-interest debt under control.
In some cases, debt can be an invaluable financial tool. For instance, it can be used to purchase a home, fund an education or launch a business. However, other forms of debt can be corrosive to your financial future.
Credit card debt can be especially dangerous because of its high interest rates. Every dollar you spend on credit card interest is a dollar that can’t be used to save for the future. Develop a plan to pay down your credit card balances. Consider consolidating them into a low-interest vehicle. You also may want to make changes to your spending so you can pay down your cards at a faster rate.
Increase your retirement contribution rate.
Do you contribute to an employer 401(k) plan? Or do you make contributions to an IRA? These tools make for very effective retirement savings vehicles, largely because of their tax-deferred growth. Also, in your 401(k) you may be eligible for employer matching contributions, which can further boost your retirement balance.
However, the only way to maximize these benefits is to contribute as much as possible to the plan. Consider increasing your contribution rate in 2017. If you can’t make a big increase at one time, you can always do it gradually. For instance, you could increase your contribution rate by 1 percent every quarter or every six months. That way, you can ease into the increased savings rate.
Ready to make your financial resolutions a reality? Let’s talk about it. Contact us at Ambrose Financial & Insurance Services. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
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