Financial Goals & Habits for the New Year!

by Sophia Bera on January 1, 2014

Happy New Year!  It’s 2014 and it’s 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:

  • 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 biz!
  • I started a business without going into debt!  (I didn’t take out a business loan, we just saved for this new endeavor and kept it lean).

Now, write down three areas you’d like to improve upon.  Here are mine:

  • Re-evaluate our insurance needs for 2014.
  • Max out our Roth IRAs
  • Spend less money going out to eat

Pick One Financial Goal You Can Check Off Your List

Many times when people think about improving their financial life, they think about cutting back, saving more, but they overlook some really important areas of improving their financial lives.  These things below will help you make great strides in making sure your financial life is in order.  Here are a few that I recommend:

  • 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 your great benefits
  • Open a Roth IRA at a discount brokerage firm like Scottrade, Schwab, Betterment, or Fidelity.
  • Increase your 401(k) contributions by 2%

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 buy a morning cup of coffee, go out for lunch with your co-workers, or have pizza and beer every Friday night?  Figure out some less expensive alternatives or cut down on the frequency.  Can you switch from fancy coffee drinks to tea, bring your lunch three days a week, or host a potluck on Friday nights?  Use a habit tracking system like Lift to help you stay on track.  I also did a post on 5 Steps to Organize Your Financial Life that speaks about creating 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.  Focus on building financial security in 2014.  If you’ve got that down, maybe you’re ready to invest in ongoing financial planning services?  May 2014 be your most prosperous year ever!