Time to read: 5 Minutes
The beginning of the new year is undoubtedly the most popular time to commit to making life changes.
Whether it’s deciding to invest in goals they’ve put off or to prioritize lifestyle changes that have fallen through the cracks, it’s easy to understand why January 1st is seen as a natural starting point: a new year signifies a new chapter.
Much like goals surrounding personal health or spending more time on a beloved hobby, financial resolutions can be extremely helpful in creating good financial habits. Keep reading to learn what financial resolutions you should make in the new year.
Create or Revisit Your Goals and Time Horizons.
If you don’t have any financial goals in mind, the first resolution on your list should be creating them.
Sit down and think critically about what you’re looking to get out of your finances in both the short- and long-term. Is there a purchase or experience you have in mind? Do you want to get serious about paying down debt? Is there an upcoming milestone you’d like to feel more prepared for?
As you create your goals, think about what your time horizon is for each of them. What are you looking to achieve in the next five years? What about in the next twenty? Knowing when you want to achieve each of your goals will make it easier to plan in a way that positions you for success on the right timeframe.
If you’re somebody who already has well-outlined goals and time horizons, take some time at the beginning of the year to revisit them. It’s possible that some of your goals, or their timelines, have changed. Perhaps a change in circumstance, like adding somebody new to the family, a change in income, or new interests, have resulted in a goal being added to your list or allowed you to reach a goal early.
You may already be doing this throughout the year, but if you don’t, take some time to assess your goals, think about how your ideal lifestyle and circumstances may have changed, and make sure you’re still on the right track.
Create or Revisit Your Budget.
Having a budget, especially when you’re a high earner or responsible with money, may seem unnecessary. However, having structure, even a loose one, around your finances will help keep you on track with your goals and approach your finances with less stress.
Make sure your budget includes regular expenses, like your mortgage, car insurance, utilities, and food costs, as well as savings and investments. Once you know how much is left over for discretionary spending or “fun” money, you can determine if you’re comfortable with the allocation or want to redirect any additional funds towards your goals.
Many people already have a budget, and if you do, taking time at the beginning of the year, as well as anytime your circumstances change, to revisit your budget will help you be sure that it’s still working for your current lifestyle and needs. A new goal, a change in income, or a change in living expenses will naturally change your budget. By revising your budget, you’re ensuring that those changes are made with intention and with your financial goals in mind.
Start Educating Your Children and Grandchildren on Finance.
For many people, discussions around finances with future generations don’t come up until they begin estate planning, if ever. While many assume that conversations surrounding money are going to be uncomfortable, they don’t have to be. Not to mention, they’re important to have.
Having open and honest conversations with younger generations helps them understand the importance of good financial habits. Hearing about what goes into financial planning, what you’ve learned throughout your life, and even mistakes you may have made will help them understand how even seemingly small actions make a big impact over time. Offer to walk them through your budget (in as much or little detail as you’d like), share the strategies you’ve used, and explain how they’ve helped you reach your goals.
If you haven’t already started these conversations, make them one of your New Year’s resolutions. Opening the door will remove the stigma around discussing money and make your family members feel more comfortable coming to you with questions and asking for advice. Most importantly, it will help to instill good financial values and practices sooner rather than later.
Meet with a Financial Planner.
Many of the steps we’ve shared here will come up in your meetings with a financial advisor. However, a trustworthy financial planner will provide you with advice that is specific to your situation and work with you to create a plan that is optimized for your unique goals and needs.
The Tranel Financial Group is here to help you start the new year with intention and confidence. Reach out to us today to schedule a complimentary consultation!
All securities through Harbour Investments, Inc.. Member FINRA / SIPC. Investments are not FDIC/NCUA insured. No bank or credit union guarantee. May lose value. Harbour Investments, Inc. is a Registered Investment Advisor with the SEC. The Tranel Financial Group is an independent firm not affiliated with Harbour Investments, Inc..
Note: This content is for informational purposes only and should not be considered financial or tax advice. Please consult with your financial or tax advisor for guidance tailored to your specific situation.