To quit smoking, lose weight, and exercise more are some of the resolutions people make at the start of the year. All those are health-related resolutions. Studies show that over 30% of people do make financial resolutions. For instance, you may resolve to improve the fiscal fitness, but lack the funds to pay for the gym membership. You should understand why you need to make financial resolutions. The following are to financial resolutions you need to consider.
Make family budget
You can gather all the family members and come up with a family budget. It is necessary to make a budget and track all expenses and incomes. This can be an eye-opening thing for many people. It gives families a good understanding of where the money is going every month. You can try to live on a budget for about two months before you make any necessary adjustments.
Pay down debt
Let this year be the one you are eliminating your debts. It is important to make commitments and begin paying it early. You should prioritize the debt by putting the high interest rate debt. Pay your high interest rate debts first. Avoid using credit cards when you are paying your debts.
Have an emergency fund
It is advisable to build-up emergency financial cushion. Remember that life can sometimes throw curve balls. Thus, you should have an emergency buffer, which can sustain your family for the coming months. You should get your hands on it quite quickly. Thus, you should have a money market account or savings account. In this way, your money will accrue some interest.
Save for retirement
It is advisable to start saving quite early for retirement. This will help you to take advantage of compounding interest over the coming years. It is advisable to contribute to Roth IRA. The money, which you invest from Roth IRA can be used for your retirement.
Save for education of your children
You need to start saving for the children’s college education as soon as possible. This is because there are many taxes advantages with investment plans that are tax-free.
Review your credit report
It is possible your credit report can have an effect on your credit card approvals, mortgage rate, apartment requests, and even job applications. Thus, it is necessary to review it every year and monitor for accuracy as much as possible.