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Financial Goals and Habits for the New Year!

Happy New Year! The start of a new year is a great time to take a look at your financial life and do some assessing. Getting out of debt and saving money often top the list of most popular New Year’s resolutions, but this year, I challenge you to create better habits.

Examine your bank account, retirement accounts, credit card statements, monthly payments and debt load and write down three things you rocked at! You didn’t think I was going to say that, did you? Yes, write down three things that you did well. 

Here are mine for 2013:

  • I rolled over my old 401(k) to my Roth IRA.
  • We kept our fixed living expenses low so that I could launch my own business!
  • I started a business without going into debt! (I didn’t take out a business loan, just saved for this new endeavor and kept it lean).

Now, write down three areas you’d like to improve upon. 

Here are mine for 2014:

  • Re-evaluate my insurance needs for 2014
  • Max out my Roth IRA
  • Spend less money going out to eat

Pick One Financial Goal You Can Check Off Your List

When people think about improving their financial lives, they often think about cutting back and saving more. But those goals leave out some really important changes that can help improve your financial life. Consider these goals, too:

  • Get your estate planning documents in order
  • Buy term life insurance
  • Add an “umbrella” policy to your home and auto insurance policies
  • Adjust your company benefits during open enrollment to take advantage of all the benefits available to you
  • Increase your 401(k) contributions by 2%
  • Open a Roth IRA at a discount brokerage firm like Vanguard, Schwab, Betterment, or Fidelity

Pick One Habit to Improve Upon

We are creatures of habit. Notice parts of your routine and how you might adjust them to save money: do you always go out for lunch with your co-workers, for example? Choose one habit that you can replace with a less expensive alternative at least some of the time. Can you switch from fancy coffee drinks to tea, bring your lunch three days a week, or host a potluck on Friday nights rather than eating and drinking at a restaurant?

For more details, check out 5 Steps to Organize Your Financial Life and think about how you can schedule ongoing check-ins to track your progress.

Now that you’re cutting your expenses, make sure you’re allocating that new “found” money towards your financial goals. Set up automatic contributions so that that money doesn’t just sit in your checking account waiting to be spent. Focus on building financial security first. 

If you’ve got that down, maybe you’re ready to invest in ongoing financial planning services? 

Wherever you are, I hope this is your most prosperous year yet!

You might also enjoy reading:

My Favorite Online Experts
Should I Buy a Car with Cash or Take Out a Loan?
Ask Gen Y Planning: Should I Be a Socially Responsible Investor?
Personal Finance Blogs and Podcasts to Add to Your List
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I'm Sophia! And I'm not your father's financial planner. I work virtually with clients across the country to help them navigate through big life changes and reach their goals. I'm also a foodie, a true crime junkie, and a lover of karaoke. Let's chat! Click here >>

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