The beginning of a new year is the perfect time to figure out what you’ll do better than the year before. With rapid changes to the economy going on all around us, many people have added finances to their goals for 2021. Here are a few common financial resolutions you might have — and tips on how to achieve them.
Save More Money
Saving money, whether for an emergency fund, holiday spending, or for retirement, is a common financial resolution at the start of the year. There are many ways to go about it, based on your goals.
- Increase your 401(k) or IRA contribution to the max amount you can afford. Take advantage of any employer matching you may be eligible for.
- Open a savings account specifically for what you’re saving for: Christmas fund, emergencies, a new roof, etc. Make that a high-yield savings account and you’ll save even more.
- Set up auto transfers to your savings account. This might be an option through your employer’s payroll or something you set up directly with your bank. Set it and forget it, and it will add up faster than you think.
Spend Less Money
The only way this resolution works is to know how much you’re spending in the first place, so if you don’t already have a personal or family budget, set that up. Figure out your fixed costs (those you can’t change) and the costs you do control. Where can you cut back?
- Reduce non-essential or “fun” spending. Don’t fully eliminate it or you might rebel later and overspend on something you don’t really need.
- Give yourself a budget for clothing, eating out, and other splurge spending.
- Shop around on those fixed costs: home insurance, auto insurance, life insurance, etc. It’s worth getting estimates from time to time to make sure you’re not paying too much.
Improve Your Credit
Credit scores make a big impact on our financial lives. Your score determines whether you get approved for a loan at all and the interest you’ll pay when you are approved. Having a low credit score costs you money and a high score saves you money.
There are plenty of things you can do to improve your credit score:
- Get a copy of your credit report to check for errors or old, forgotten debts that need to be paid.
- Pay your credit card in full each month whenever possible. Cut back on credit card spending to make this easier.
- Pay your bills on time. Set up autopay for as much as you can so you can’t forget.
- Keep zero balance credit cards active and try not to open new accounts.
Protect Yourself from Financial Ruin
Financial ruin often comes in the form of debt, but it also occurs when you can’t afford the expense of a necessary but large purchase: a new car after an auto accident, a new roof after a storm, paying the mortgage after the death of your spouse. The right type and amount of insurance can help protect you financially all year long. Make this the year you protect yourself, your family, and your property properly.
- Talk to your insurance agent to check your home insurance policy limits. Home values and replacement costs rise over time. Has your homeowners insurance kept up with that?
- Increase coverage or add coverages to your auto insurance policies that protect you from uninsured and underinsured drivers.
- If you replace your old vehicle with a new one, make sure you add collision and comprehensive coverage to your policy.
- Make sure you and your partner or spouse have life insurance coverage. Think about the cost to pay for funeral, housing, and education for many years when you decide on how much to purchase.
- Consider an umbrella policy to cover unforeseen accidents that cost more than expected. Umbrella insurance is less expensive than you think.
Ready to financially protect yourself and your family this year? Contact Charlotte Insurance, today to learn how we can help you find the best insurance protection at a price you can afford.