How to Get Your Finances in Order for 2018

 How to Get Your Finances in Order for 2018

Improving your finances is usually one of the things that people put at the top of their New Year’s resolutions list. It makes sense to want to look out for your financial situation but following through on New Year’s resolutions is notoriously a hard thing for many people to do. It takes discipline and changes in behavior to achieve the results that you want.

 If you’re struggling with putting some financial goals into practice, there are a few simple steps that you can take that will help you get your finances in order for 2018.

 

Immediately Pay Off Credit Cards and Holiday Bills

 Many people tend to overspend during the holiday season thanks to vacations, gifts, and parties. They tend to forget about bills and payments, but the arrival of January is a harsh reminder that you need to save money for bills.

 You want to strive to pay off any debts that you’ve created right away so that you avoid large interest charges on credit cards that you may have used. Set up a timeframe for when you plan to pay off your debt so that you can get it done within a few months. If you’re expecting some extra income in these first few months then use at least some of it to pay off any type of debt that you may have.

 If you’ve dealt with bankruptcy in the previous year, you’ll want that cleared from your life and credit report. You can find out how to start again after bankruptcy at https://crediful.com/bankruptcy-on-your-credit-report/. You want to strive to have the best credit possible during this year.

 

Build an Emergency Fund

If you haven’t yet, you want to start building an emergency fund in 2018. An emergency fund should have about three to six months’worth of living expenses. This number should rise as you retireand should be coordinated with the rest of your investments. You can easily build this fund by setting up an automatic draft to take from your paycheck. The money will be distributed into your specified savings account. This account can be helpful if you suddenly fall on hard times or need a little extra help paying off credit card debt.

To resist dipping into your emergency fund when you don’t need it, set up your savings account at a different bank than your checking account. Having them at different institutions will make it harder for you to access your savings account when you’re tempted.

 

Increase Retirement Plan Contributions

When it comes to saving for retirement, you want to think about putting a little extra into your plan this year. A few extra hundred dollars or so can really make a difference in the long run. If you’re expecting a raise then definitely increase the amount you put in if your funding isn’t at its maximum already.

 

Rebalance Existing 401(k) and Retirement Account Investments

Beside reevaluating your retirement plan, you’ll want to look at all other investments that you have to ensure that you have a good mix of both bonds and stocks. With the way that equity markets are looking nowadays, the percentage of your money in stocks is likely higher than you planned. As time goes on an investment account can grow substantially. Just be aware that during recessions, your accounts will suffer.

If you’re expecting to retire soon then you should consider the number of stocks you have and the number you’re comfortable owning. You may also wish to seek an alternative platform to continue trading on – if this is the case, you could check out this https://www.stocktrades.ca/questrade-vs-qtrade/ page to learn about two options that you are able to choose from if you are in Canada. While you’re reviewing these accounts, you also want to take a look at your beneficiary designations to ensure that they are up to date and correct. They should reflect the proper names for those who were recently married or born.

 

Review Home and Car Insurance Policies

You want to review your car and home insurance policies at some point in 2018. Insurance companies tend to raise their home and auto insurance premiums at the beginning of the year. Even a small increase can add up to a lot over time.

You’ll want to sit down with your insurance agent at least once every three years to ensure that you’re taking the best discounts available to you. You also want to ensure that you have the proper coverage as your finances change. Protecting your assets and managing risks are extremely important when dealing with your financial planning. 

During your review of your insurance, you want to review deductible amounts on each of your policies for home and auto. You might find that you can have lower premiums, or you can use your built-up emergency fund to cover a high deductible in the event of a loss.

The Bottom Line

Each year, you should want to reevaluate your finances and see where you can do better. Start by reviewing the small expenses and go from there. Seeing that you have made or can make progress can make you feel optimistic about the rest of the year.