Yahoo Finance A Simple Resolution for the New Year
The end of the year is often a time for reflection. Looking back, there is no doubt that 2016 had its fair share of drama, ranging from the grueling election cycle to market volatility to a seemingly endless parade of shocking world events. In many respects, it was a year unlike any we have seen before.
With 2017 already shaping up to be a year full of intrigue and unknowns, what better time than now to pause, take a deep breath and consider a necessary change for next year in the form of a New Year's resolution -- the difference is, this time you must plan to actually stick to it.
[See: The 25 Best Blue-Chip Stocks to Buy for 2017.]
The idea of making a New Year's resolution is rooted in the desire to improve. These good intentions go a long way, but they also are the reason why it is difficult to find a parking spot at the gym in January, but much easier come March. So what exactly is the reason why it's so challenging to keep those resolutions that seem both exciting and obtainable on New Year's Day?
Although there is no simple answer to that question, perhaps one reason is the complexity we usually bring to the resolution process. So this year, instead of taking on too much, try to keep it simple. Choose one thing and make that your focus for the entire year.
Choosing and making a New Year's resolution can be an introspective and personal experience. As a result, it should come as no surprise that dieting and exercise are usually top of mind for many people. In fact, Allianz Life recently conducted its 2016 New Year's Resolution survey of Americans and a full 40 percent of respondents said exercise and diet were at the top of their resolution list for 2017. Interestingly though, not far behind at 37 percent was managing money better and saving more. Resolutions or not, managing money has never been associated with simple. However, it doesn't need to be that way. Regardless of your age, there are simple and obtainable financial resolutions to consider for every generation.
Millennials
Try living on a cash basis for one month. Living off of cash for even a short amount of time can be an eye-opening experience and serve as a reminder to keep new debt in check. It can also be illuminating as to the true cost of living expenses and lead to better budgeting habits.
[See: 20 Awesome Dividend Stocks for Guaranteed Income.]
Set up automatic deductions. Select a certain amount from each paycheck and have it automatically deducted every month and put into an investment, used for paying off student debt, added to a 401(k), or even put in an emergency savings fund. The saying "you can't spend what you don't have" is true in this case, so resolve to put your money to work for you in 2017.
Generation X
Protect yourself and your family. Many Gen Xers are now parents and are also focusing on careers and reaching their maximum earning potential. No one likes to think about it, but resolving to get life insurance and/or disability insurance should be a strong consideration to ensure a plan is in place if something were to happen to you or a spouse/partner. There is no better time than now to fill out that insurance application.
Revisit financial plans. As life changes so does the need to adapt financial plans. Is there a plan in place to address the cost of college? Are 401(k)s being maxed out to leverage the full employer match? Financial advisors can play a key role in developing financial plans, and even possibly offer tax planning suggestions to maximize savings. Making the resolution to find an advisor to work with in 2017 can be beneficial in many ways, both now and in the years ahead. Talk with family and friends who use an advisor for their recommendations on someone you can feel confident and comfortable working with.
Baby boomers
Review estate plans. If it's been a while since plans were reviewed, pick a time to check that everything is in order. Are all beneficiaries still correct? Are charitable giving plans still set up for the organizations you support? Does anything need to be changed or reallocated based on tax treatment?
Plan for many years ahead. Americans are living longer, which means a longer retirement for boomers. Take a moment to ensure that budgets are on track and that investments are keeping pace with cost of living increases. Retirement could easily last 20 or more years for many boomers and you need to plan for it. Financial advisors can play a key role in helping you determine when you can retire and how to make your money last, including suggestions on how to create tax efficiencies to help you stretch your money.
There are many other potential financial resolutions that can be made for the New Year. Regardless of generation, something as simple as resolving to save even a modest amount can make a big difference. For example, setting aside an extra $50 per week can be impactful. Over the course of the year, that $50 you might not even miss on a weekly basis adds up to $2,600 saved. That is $2,600 that can be used for paying down debt, investing (the power of compounding can lead to even more gains/savings), or even going on a fun trip or buying something special.
[See: The 7 Best Bank Stocks to Buy for 2017.]
As we end 2016, taking the first step by resolving to make even the simplest financial change can lead to great results in 2017.
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