Many of us use the new year to turn a new page. This can include anything from starting a new exercise regimen to committing to cooking more at home. It is also a prime time to assess your current financial situation and take concrete steps to improve it.
Here are several steps you can take to improve your financial life at the start of the new year.
Some may be more suitable than others for your situation.
Start with a comprehensive look at your current financial position. Are you generating enough income to cover expenses? Where could you cut the cost of living? Are there any loans or debts that you can pay off faster? Are you saving enough for your most important goals?
To get a good sense of where you stand, ask the tough questions. Then consider any of the following steps that seem appropriate.
Make a plan to pay off your debt as soon as possible. Paying back high-interest loans – like credit card debt – as quickly as possible should be a priority. As far as credit is manageable, you can still make monthly payments, but the more you pay off, the gentler your monthly budget will be.
Financial security is closely related to the amount of money you have at your disposal. Commit to building an “emergency fund” equal to six months of your income to meet unexpected short-term needs. Make a commitment to increase your pension contributions every month if you can.
Many employers find it difficult to find the right employees to fill positions. This may be the best opportunity in a long time to find a job that offers better pay and possibly even more fun for you.
Do you think you can get more out of your portfolio? Take a closer look at what works and what doesn’t. It may be time to “cut your losses” on investments that have proven disappointing while investing some of that money in assets that offer greater potential.
If you feel that more can be done to strengthen your financial position, make a commitment to start that process now. It can be beneficial to seek advice from a financial advisor to help you find a path to a more prosperous future.
Jeff Jolly, CFP, is a Private Wealth Advisor and Senior Vice President at Ameriprise Financial Services, LLC of North Haven. He specializes in fee-based financial planning and wealth management strategies and has been with the practice for 16 years. Contact him at 203-407-8188 extension. 330