Financial Resolutions for the New Year

Every year I make my resolutions for the new year. Some of them involve projects around the house, some involve trying to fit into those clothes that miraculously "shrunk" during the year, and some are related to financial matters. Now don’t worry, I won’t bore you with stories of sit-ups or planting shrubs. Instead, I’ll share some financial ideas I hope you’ll think about for the new year.

I know it’s not the most exciting topic to read, but I assure you it is very important. Taking the time to address these ideas now could mean the difference between financial freedom and financial hardship. Since everyone’s situation is different, some of these may apply to you and some may not. And, since we all have different financial needs, the resolution ideas are generic. Please seek professional advice or study the topics in detail for specifics to you situation.

Life Insurance - Both spouses should be covered. Even spouses who are not employed outside the home. Term insurance is relatively inexpensive if you are healthy and for most young couples, it is the best deal.

Disability Insurance - This is insurance to replace your income if you become disabled. Statistics show you are much more likely to use disability insurance in your working years than life insurance. If you don’t have it, get it.

Car Insurance - Every couple of years, re-evaluate your coverage. Get quotes from a couple of companies to see if what you are paying is in line. Also, make sure you are not over-insured or under-insured or are paying for unnecessary coverage. If you used to commute a long distance and now work at home, let your agent know. It might mean a difference in your premium.

Retirement Savings - It may be a long way away but time is your best ally in retirement savings. If your company has a 401k, take advantage of it. If you are already taking part, consider raising your contribution. Another great investment vehicle is a Roth IRA. They are a great vehicle for retirement savings. Your after-tax contribution grows tax-free and when you retire, you pay no tax on the withdrawals. Remember, with compound interest, even a small amount invested today can grow to a large sum by retirement.

Credit Cards - Pay off those balances. Period.

Will - If you don’t have one and you have children, see your lawyer. You need to know that if you are not here, your wishes regarding what’s most important to you are carried out.

Becoming a Stay at Home Mom - If it is what you really want to do, make it happen. It doesn’t have to be all-or-nothing. Many stay at home moms now work part-time from the home. Just don’t let money make your decision. If it is what you really want, you can find a way to make it happen financially.

Budget - If you have one, keep trying to stick to it. If you don’t, consider starting one. It’s a great way to find those extra dollars all us seem to need.

I hope you use some of the ideas above in setting your New Years’ resolutions. They aren’t exciting, but they are important. I’ve enjoyed writing for you this past year and hope you have learned something from my articles. Best wishes for a healthy and prosperous new year.

About the Author: Scott W. Danger is a certified public accountant with over 15 years' experience. He lives with his family in Southern Minnesota.