Written by: Guest | Best Company Editorial Team
Last Updated: February 24th, 2020
Guest Post by Lexington Law
The New Year is a great time to set goals and turn over a new leaf. Popular resolutions include losing weight and living a healthier lifestyle. But what about your financial health? Consider looking at your finances to see what you can do in 2019 to get financially healthy.
Here are five resolutions to get you financially fit:
1. Pay off debt
A New Year's resolution to pay off debt will benefit you financially. Create a workable plan and stick to it as much as possible. One of the best ways to get motivated and gather some momentum is to first pay your small debts. You’ll get your first taste of success and feel like you're already achieving what you resolved to do in 2019. Other steps include the following:
- Live within your means
- Consolidate your debt by going for low APR credit cards with balance transfer options
- Open a savings account for your emergency fund.
Every little step you take towards financial health is a good thing.
2. Start a savings account/emergency fund
Emergencies are always unexpected. The reality is that you could lose your job, get into a car accident, or be hospitalized for a lengthy period.
Hopefully, none of these things will happen to you. But should they happen, do you have enough money to cover the associated cost? One of the most important things you can have in your financial toolkit is an emergency fund. Saving for emergencies might seem difficult because you’re saving for the unknown. However, what you need to remember is that without an emergency fund, you may end up in financial trouble.
During the new year, consider setting up an emergency fund with at least $1,000 in it. This amount is enough to cover at least part of an emergency. The goal is to eventually have about six months’ worth of expenses based on your current household spending. Once you have a solid foundation, you can begin adding more funds to the account.
3. Start saving for retirement
Research suggests that more than 21 percent of Americans have nothing saved for retirement. Many people have no solid plan for how they’re going to save for retirement.
Retirement is real, and if you don’t have enough saved, it may be difficult to pay for everything. Did you know that the average healthcare cost during retirement for a couple is estimated to be about $280,000? There is no doubt that you’ll need the money. It makes sense to start saving for your retirement as soon as possible.
A practical step is to set up either a 401(k) or a Roth IRA. You can usually do this through your employer, who will sometimes match up to a certain percentage of your contribution. That’s basically free money for retirement.
If your employer doesn’t offer a 401(k) or Roth IRA plan, then you can set up an appointment with a bank to help you set one up. Talking to a financial planner or banker may give you an idea of how much to save. It’s never too early or too late to start saving for retirement.
4. Create a budget and cut unnecessary expenses
Budgeting is necessary if you want to take control of your finances. A practical way to come up with a budget for 2019 is to go over your 2018 spending. Look at your credit card statements and bank statements. See where you spend money and then look for ways to cut unnecessary expenses. Maybe you spent 10 percent of your income last year eating out. See what you can do to cut that expenditure and watch your savings grow.
5. Sign up for credit repair
In the grand scheme of things, signing up for credit repair is a strategic financial move. With accurate credit report and better credit score, you can qualify for interest rates which can save you money in the long run.
Credit repair takes time and commitment. If you need help repairing damaged credit, give the credit specialists at Lexington Law Firm a call for a free personalized credit consultation. They’ve helped hundreds of thousands of clients for over a decade remove unfair, inaccurate, and unverified information from their credit reports.
The start of 2019 is the perfect opportunity to get your finances in shape. No matter how much you earn, you can save money and achieve financial security with the right strategies.