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Whether you rang in the New Year at a local pub or watched the Times Square celebration from the comfort of your couch, 2017 is officially upon us. As each New Year brings optimism and a blank slate, the topic of resolutions is sure to come up in conversation. While some of us may aim to receive a promotion, get in shape or conquer a new hobby, I also encourage you to set some money-related goals this year.

Financial resolutions tend to be kicked down the road because they aren’t always fun or eagerly anticipated. However, a few realistic resolutions can truly help set your finances on a positive path for 2017 and beyond. Here are four to consider.

Reduce Debt
For many, reducing debt may rank high atop the list of financial resolutions, regardless of the time of year. Debt is not something you can resolve in the blink of an eye, but taking small steps can make a huge difference.

Begin by making a concerted effort to cut excess spending. This may mean eating out less or taking a staycation, rather than a traditional vacation. Next, work to stay on track with credit card payments. Consider putting together a calendar with due dates or setting up automatic payments. If you find yourself in a position where you can only pay one card in full, choose the one with the highest interest rate. It’s also important to carefully consider opening new credit cards as you attempt to reduce debt and protect your credit score.

Create an Emergency Fund
Emergency funds are important tools that provide a safety net in case of the unexpected. Everything from an emergency medical procedure to an auto accident, broken water heater or roof collapse can place serious stress on your finances. If an emergency fund is not established, you might need to pull from investments, retirement funds or college savings accounts to cover costs.

Setting up an emergency fund can be easy. One way to do it might be opening an account at the bank and establishing automatic contributions from your primary account. While it can be difficult to sacrifice spending money now for future use, resist the temptation to use this money for anything other than an emergency or unexpected event. It’s generally good practice to keep the account stocked with enough money to sustain living and loss of income for three to six months.

Tidy Up Accounts
Between different jobs, moving and various ventures, you’ve likely opened many different cards and bank accounts over the years. Scan through your credit report and check with your bank to verify open accounts. Close any that you find with a low balance or those that are inactive. This resolution does not require a great deal of time or effort, but cleaning up and organizing bank accounts will help your finances stay on track.

Save for Education
New or young parents should avoid delaying the process of saving for your child’s education. Consider opening a 529 Plan, which allows money to grow tax-free for a beneficiary as long as the funds are used for qualified educational expenses such as tuition, room and board, or textbooks. Saving for college early and maintaining consistent contributions over the years will help prevent large, lump-sum withdrawals down the road, which could strain both assets and your greater financial portfolio.

As you discuss New Year’s resolutions around the dinner table, also think about your finances. What have you done well? Where have you struggled? Where do you want to be one, two or even five years from now? Use the answers to these questions to formulate a few financial resolutions. A little thought and effort now can go an exceptionally long way. Happy New Year! iBi

Patricia G. Cutilletta, CFP is an Executive Director and Financial Advisor with the Wealth Management Division of Morgan Stanley in Chicago.

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