Many of us take advantage of a new year to turn over a new leaf. This can include everything from starting a new exercise regimen to committing to cooking more at home. It’s also a prime time to assess your current financial situation and take concrete steps to improve it.
Here are a variety of steps to take to enhance your financial life as the new year begins.
Some may be more appropriate than others for your circumstance.Reviewwhere you stand
Start by taking a comprehensive look at your current financial position. Are you generating enough income to meet expenses? Where could you cut back on living costs? Are there loans or debt you can pay off quicker? Are you saving enough for your key goals?
Ask the tough questions to get a good sense of where you stand. Then consider any of these following steps that seem appropriate.Deal with debt
Make a plan to pay down debts as quickly as you can. A priority should be to repay high interest borrowing – like credit card debt – as quickly as possible. To the extent loans are manageable, you can continue to make monthly payments, but the more you pay off, the easier it will be on your monthly budget.Build your savings
Financial security is closely related to the amount of money you have available to you. Commit to building up an “emergency fund” equal to six months of your income to help deal with unexpected short-term needs. Commit to boosting your retirement savings contributions per month if you can. Consider a new job
Many employers are having a hard time finding the right kind of people to fill roles. This may be the best opportunity in a long time to find a job that offers better compensation and that you may actually find more enjoyable.Invest effectively
Do you think you might be able to get more out of your portfolio? Take a closer look at what’s working and what isn’t. It may be time to “cut your losses” on investments that have proven to be disappointing while putting some of that money to work in assets that offer greater potential.Make 2022different
If you feel like there’s more you could be doing to shore up your financial position, make a pledge to get that process started now. It may be beneficial to consult with a financial advisor to help you find a path to a more prosperous future.
Jeff Jolly, CFP, is a Private Wealth Advisor and Sr. Vice President with Ameriprise Financial Services, LLC, in North Haven. He specializes in fee-based financial planning and asset management strategies and has been in practice for 16 years. Contact him at 203-407-8188 ext. 330.