New Year, Fresh Start

 

You’ve stayed up until midnight, watched the ball drop, and said a great big “Bye Felicia!” to 2020. A new year can feel so refreshing. It's a great time to ditch bad habits and set new goals. Perhaps you’re going to level up that fitness game, read more, set healthy boundaries, or (fingers crossed) travel more. While you’re swearing off procrastination and vowing to declutter closets, consider adding a few financial resolutions to your list too.

Plan a time to sit down and assess your financial situation. Before you start judging your finances too harshly, remember that after the crazy year we just had, you need to allow yourself a little forgiveness. During a time of radical uncertainty, your finances might have gotten off track, and that is totally understandable. You did the best you could! However, a lot might have changed, and it’s good to make sure our financial plans are still realistic and aligned with our life goals. 

Here’s some ideas of how to get your finances on track for the new year:

• Review subscriptions. Maybe you accidentally forgot to cancel something after a free trial, or you realized you only had Netflix because of The Office (brb, crying). Perhaps an underutilized gym membership is eating up a chunk of your income. Whatever the case may be, review your emails and bank statements, and cancel subscriptions that no longer interest you.

• Automate. You can (and should) set up automatic payments for bills, which will help you to pay on time and avoid any late fees. You can also automate your paycheck deposits, savings, and investments. Talk to your employer, your bank, utility companies, creditors, etc. to see where you can save yourself some budgeting work each month. Quick tip: make sure to align bill due dates with your payment cycle to avoid overdrawing.

• Check up on your paycheck. Update your W-4 income tax withholdings to make sure they reflect your current situation. It is important to make sure your employer is withholding the appropriate amount of taxes from your paycheck. The IRS provides an online tool to help you assess your withholdings. 

Make sure that you’re taking advantage of any employer sponsored benefit plans available to you. 

Have you been diligently working through a global crisis, becoming indispensable to your company and gaining new profitable skills? You may want to ask for a pay raise.

• Passwords. You’ll have so much more financial success if you can easily track and manage your accounts. Make sure you know your passwords to your financial accounts and make sure you’re able to view them with ease (get the app!). Also, the beginning of the year is a great time to ensure security by resetting passwords.

• Manage credit. Your FICO scores will have a big affect on your ability to borrow and your interest rates. Learn about how credit works, and how you can boost your score. Monitor your credit with Credit Karma.

You’re entitled to one free credit disclosure every 12 months from each nationwide credit bureau and from nationwide specialty consumer reporting agencies. Look at your credit report and become more aware of what creditors see, or check for inaccuracies in your report. 

• Budget. Financial wellness 101. Track your income and expenses, and make sure they’re aligned with your goals. If you’re overwhelmed and you need help starting a budget, read our tips here or make an appointment with one of our counselors! 

 

Before you get all stressed out by the many options for improvement available to you, remember that Rome wasn’t built in a day. You could choose to complete just one of the list items, or make one small improvement to your financial situation- baby steps! Now is the time to make a slight change, to establish a good habit, and set a trajectory for financial success. Happy New Year!

 

 

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