Financial Resolutions for the New Year

Edward Jones AdAbout 45% of Americans usually make New Year’s resolutions, according to a survey from the University of Scranton. But the same survey shows that only 8% of us actually keep our resolutions. Perhaps this low success rate isn’t such a tragedy when our resolutions involve things like losing a little weight or learning a foreign language. But when we make financial resolutions – resolutions that, if achieved, could significantly help us in our pursuit of our important long-term goals – it’s clearly worthwhile to make every effort to follow through.

So, what sorts of financial resolutions might you consider? Here are a few possibilities:

Boost your contributions to your retirement plans. Each year, try to put in a little more to your IRA and your 401(k) or other employer-sponsored retirement plans. If you’re not sure how to set up a retirement fund, it might be a good idea to talk to the best Financial Advisor Cardiff offers, or any financial advisors closer to home, and seek some advice as not all employers will create a retirement fund for you. These tax-advantaged accounts are good options for your retirement savings strategy. This way you will be in a much better place when you are older. You will be able to buy a house to retire in, you could afford to move into one of the retirement communities in omaha ne (or wherever you are located) if you would like, and even go on cruises if you want to be the elderly person stereotype! If you start saving now, you will be in a good position when you’re older.

Reduce your debts. It’s not always easy to reduce your debts, but make it a goal to finish 2014 with a smaller debt load than you had going into the new year. The lower your monthly debt payments, the more money you’ll have to invest for retirement, college for your children (or grandchildren) and other important objectives.

Build your emergency fund. Work on building an “emergency fund” containing six to 12 months’ worth of living expenses, with the money held in a liquid account that offers a high degree of preservation of principal. If you do find yourself in a situation where funds are urgently required but you don’t have them readily available, you could consider using The Net Lender and their financial services, including car title loans which could help you access the value already tied up in your vehicle. Without such a fund, you might be forced to dip into your long-term investments to pay for emergencies, such as a new furnace, a major car repair, and so on. You might not be able to finish creating your emergency fund in one year, but contribute as much as you can afford. If emergencies do arise and catch you off guard, you could always consider online loans to get you out of a tight spot.

Plan for your protection needs. If you don’t already have the proper amounts of life and disability insurance in place, put it on your “To Do” list for 2014. Also, if you haven’t taken steps to protect yourself from the considerable costs of long-term care, such as an extended nursing home stay, consult with your financial professional, who can suggest the appropriate protection or investment vehicles. You may never need such care, but that’s a chance you may not want to take – and the longer you wait, the more expensive your protection options may become.

Don’t overreact to market volatility. Too many people head to the investment “sidelines” during market downturns. But if you’re not invested, then you miss any potential market gains- and the biggest gains are often realized at the early stages of the rally.

Focus on the long term. You can probably check your investment balance online, which means you can do it every day, or even several times a day – but should you? If you’re following a strategy that’s appropriate for your needs, goals, risk tolerance and time horizon, you’re already doing what you should be doing in the long run. So there’s no need to stress yourself over the short-term movements that show up in your investment statements.

Do whatever you can to turn these New Year’s resolutions into realities. Your efforts could pay off well beyond 2014.

This article was written by Edward Jones and is a courtesy of local Edward Jones Financial Advisor, Isaac N Mills.