Written by Maridel Reyes
Every year, people make New Year’s resolutions to lose weight or kick a bad habit. But while you’re focused on getting healthy, it’s a good time to look at your financial fitness, too. Here are 10 financial resolutions everyone should make—and keep—in 2014.
1. Track spending. Creating a budget is great, but many people find them too hard to stick with. So as an easier alternative, just look at what you spend for the month of January, and focus on finding hidden expenses and places where you can trim. Then, see how small changes can make a difference in February and throughout the rest of the year.
2. Automate everything. Put bill-paying on auto-pilot: Set up online accounts so that bills are paid automatically. Automate your savings, too. To the extent your cash-flow permits, max out your contributions to tax-advantaged savings vehicles such as 401(k)s, traditional or Roth IRAs, and 529 plans for college savings.
3. Ignore your raise. If you know you’re getting a raise this year, don't go on a spending spree. Instead, use it as a way to boost your savings. Do that for a few years in a row, and you'll see a big impact on your savings accounts.
4. Don’t get a new credit card. Make a promise that you won’t take out a new credit card, even if it offers amazing benefits. Instead, cut back on using your credit cards and only do so in case of emergencies.
5. Plan for surprises. For most of us, it's not if an emergency will arise, but when. Start an emergency fund if you don't already have one. It should have enough cash to cover at least three months of basic expenses.
6. Get an insurance checkup. Devastating natural disasters over the past couple of years have reminded everyone that having the right insurance is key. In addition, having enough life insurance can save your family from difficult financial challenges if something happens to you. Look at your coverage to see if it still meets your needs and those of your family, and add or remove policies as necessary.
7. Get rid of accounts you don't use. Many people never go through the trouble of closing old bank, brokerage, or retirement accounts that they've stopped using. But that leaves you subject to inactivity fees, potential identity theft, and other dangers. Either close those accounts, or transfer them to institutions where you can keep better track of them.
8. Make or update your will. If you have a simple estate, you can make a will on the cheap. If you have a complex estate, get a lawyer.
9. Go through your subscriptions. Look at all of them—cable, magazines, websites, health clubs and otherwise. If you’re not using a subscription or no longer enjoy it, cancel it.
10. Live healthier. A fitter lifestyle means fewer medical bills. Plus, the healthier you are in your later years, the easier it will be for you to keep working. Whether it’s eating less, eating healthier, quitting smoking, or starting an exercise routine, try to make one healthy habit stick this year.
TELL US: What are your financial resolutions for 2014? Post your thoughts in the comments section below.