Posted on December 20, 2016 in

Top Ten Ways to Gain Control of Your Finances in 2017

When a new year begins, so is our ambition to start fresh and live better. There’s the drive to workout, spend more time with family and plan new adventures. But what about getting your finances in the best possible shape as well? Here are the top 10 ways to gain control of your finances and improve your peace of mind in 2017.

    1. Get a Free Credit Report: It’s important to review your credit report for any fraudulent activity. This happens often and can affect your score substantially. You can pull your credit report for free every 30 days at  freecreditreport.com. You can also get a free report at each credit bureau: Equifax, Experian and Transunion. It’s best to pull these reports at different times of the year.
    2. Commit to increasing your annual savings: It’s not what you make, it’s what you save.” The beginning of the year is the perfect time to increase your 401(k) contributions by one percent. The ultimate goal should be to contribute 10% of your salary, but that’s not always easy to accomplish. The first step is to simply start. Some 401(k) websites, like Fidelity, will let you set up an automatic increase.
    3. Establish an Emergency Fund: Make this the year to feel more secure. It’s best to keep at least a thousand dollars in an emergency savings fund. Ideally, if you’re employed, you should have three to six months of living expenses saved. Meaning, if you lost your job, savings could keep you afloat. If you’re retired, the goal should be to have at least a year of expenses saved.
    4. Make a Budget:  Sticking to a budget can help you achieve contributing to the emergency fund. Know where your money is going. Learn the 50/30/20 rule. The rule of thumb says 50% of your monthly income should go to fixed expenses, 30% toward lifestyle expenses including food, clothing, entertainment and travel and 20% should go toward savings and debt reduction. Creating a spreadsheet including accounts, assets and liabilities can help you get organized. Now is also the prefect time to consolidate bank and brokerage accounts. It gives you less to track and may cut your fees.
    5. Lower Interest rates: Do you have a high interest rate on your car or home? The start of the new year is a good time to start shopping around for better rates. You might consider looking for a credit card with 0% interest as well. It’s important to pay off your balance each month to prevent paying the extra interest.
    6. Understand your Credit Card: Revolving debt is money down the drain that could be used for retirement savings or other short term goals. Revolving debt also lowers your credit score, especially if that debt is close to the maximum allowed credit on a particular card. Lower credit scores mean higher interest rates on purchases. Live below your means so revolving credit isn’t part of your financial life. Rely on two to three credit cards that you use prudently one month and pay off the next. Building credit wisely over time helps improve your credit score.
    7. Update Your Will: Even if you don’t have a lot of savings, it’s important to establish a will. Protect your most precious assets, your children. While you can draft a will yourself, it could be more beneficial to have an attorney working on your document. They might offer suggestions you never considered. This can also protect your loved-ones from incurring expenses after you’re gone.
    8. Review Beneficiaries:  Life has many expectancies, which is why families should always be prepared. Each year, you should always check your beneficiaries on life insurance and designated accounts. Make sure accounts stay up to date. It’s important to talk with aging parents about their finances and legal documents. Remember, you want to carry out your loved-ones wishes.
    9. Tax Returns: Those anticipated tax returns! If you’re able to receive money back, consider setting some of it aside for retirement or savings. It can be a good opportunity to pay off credit card debt, saving you on interest in the long run. Contributing to a children’s college fund can also tuck away a security blanket for their future.
    10. Take time to Plan: Think before you spend! Whether you are planning for a vacation, a wedding, a celebration or a family. Take time to sit down and look at your finances. Keep debts low and try not to overspend. It’s always a good time to share your budget tips with your kids. Budgeting for an allowance will help teach them the value in earning money. Let’s all make 2017 a great year!