January 17 is typically when most New Year's Resolutions bite the dust. But surprisingly, those who make financial resolutions have a far greater success rate.
Money related resolutions fare far better than any other type of New Year's resolution, according to a survey conducted on behalf of Fidelity in 2015. Almost a third of those who made financial resolutions at the start of 2014 achieved their goals, and nearly three quarters met at least 50% of the goals that they set. Half of those who made financial resolutions believed that they were better off financially after their efforts during the year. That's a success rate worth celebrating!
NewsMax highlighted five tips the article offered for the New Year in its review of "Forbes.com: 5 Money Resolutions to Make in 2016:"
Begin your budget. You should know where your money is going, even though many folks don't like the results when they see how much money they're wasting.
Bolster your rainy day cushion. Nearly 30% of people in the U.S. have no emergency savings, according to a Bankrate survey — and many of those who do have these savings don't have enough. Financial experts recommend having enough cash in the bank to cover three to six months of living expenses.
Make a plan for tackling debt. Researchers have found that you are more likely to pay down your overall debt when you start by tackling the smallest balances first. Those small victories keep you motivated to keep moving forward.
Get your retirement number. Can you believe that less than half of U.S. workers know how much they'll need to save to live comfortably in retirement? Aim to save eight times your salary before you retire to meet basic income needs — shooting for twice your salary by age 40, four times your salary by 50, and six times your salary by age 60.
Find out your credit score. Those numbers matter — a lot. A good credit score means you'll pay less interest on loans for a mortgage, a car, or college. Here what can help boost your digits: pay bills on time, keep your overall credit card balance to less than 30% of your total available credit, and don't close your oldest accounts because it will shorten your credit history.
This is a good opportunity to review your financial portfolio and determine whether your asset allocation is still appropriate. It's normal to have some anxiety, especially after a year as volatile as 2015. During times of volatility, try to keep focused on long-term goals.
In addition to reviewing your investment options, you should review your retirement strategy and your estate planning. It's never fun to talk about estate planning, but it's important. Many people think a will is a "set it and forget it" type of thing. Not so.
Updating your estate plan should be done every few years, depending on your circumstances. Few lives are without changes in family relationships, jobs, economic status, birth, death, etc. All of these changes require a review of your estate plan. If you were so lucky to welcome a few grandchildren into the fold, you'll want to be sure they are included in your will. And if your year included a divorce, it's likely you don't want to give your ex-spouse your retirement accounts. Meet with Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate attorney to ensure that your estate plan is up to date.
Reference: NewsMax (December 30, 2015) "Forbes.com: 5 Money Resolutions to Make in 2016"