January 27, 2023

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Financial considerations for the new year

 

As the year comes to a close and a new one begins it’s common to start making resolutions. Resolutions often include fitness goals, career goals and personal development projects, but not everyone prioritizes their financial goals at the beginning of the year. Setting achievable targets for savings and investment plans or even budgeting regularly may help bring you closer to your financial goals this year. So here are a few financial considerations to take into account as you make your money resolutions for the year.

Preparing for the future

Insurance is one of those things not many people talk about, but it can be a crucial to attaining peace of mind. The new year might be a good time to think about life insurance for financial protection. Whole life insurance, for example, with its lifelong coverage, could be a good option for those who want to make sure their dependents are provided for in future. It may also be the right time to review existing insurance policies and take a second look at limits, beneficiaries and other details.

Reviewing your credit profile

Getting a free credit report could be an easy first step to making better financial decisions. A periodic review of your credit report may help you to better understand your creditworthiness and what you can do to improve it. Regular checks also help you ensure that your report is free from inaccurate information. If your credit score is lower than you like, you can always take steps to improve it by taking simple steps such as making timely payments or reducing your credit utilization.

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Planning for luxuries

While budgeting, many people may allocate funds to important expenditures like mortgage payments or appliance purchases but not for recreational spends like vacations or video game consoles. Instead, they choose to dip into their savings to fund leisure pursuits. In the new year, consider planning and budgeting for big non-essential purchases. Not only can it be motivating to save up for something fun, but it also gives you time to really think about what you’re spending money on. After six months of saving, you may decide you don’t really want a new luxury watch, but you’d rather spend your money on a weekend getaway. Planning ahead for luxury spending could help prevent impulse purchases, too.

Setting up autopayment for certain bills

Missing bill payments can hurt your credit score and come with late fees. Setting up autopayment may be a solution for some people. It allows you to ensure that bills are paid on time and gives you one less thing to worry about. This may not be possible for everyone, because it does mean you have to ensure you always have sufficient funds when the payment date rolls around, but it’s worth considering for anyone whose issue is forgetfulness rather than lack of funds.

Learning from last year’s mistakes

Making new resolutions without revisiting last year’s goals is a missed opportunity. Reflecting on previous financial resolutions could be a way to ensure that the same mistakes are not repeated. For example, what if you couldn’t save as much as you hoped because you spent a lot on car repairs? Upon reflection, you may find that it’s better to buy a new car rather than to keep repairing the old one. Alternatively, you may find that a big chunk of your savings was lost to an overseas holiday – this might just be an indication to save separately for your vacation so that your savings don’t suffer.

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When it comes to making financial resolutions, everyone has their own lifestyle and needs to consider. But taking the time to plan and analyze may put you in a better position to following through with those resolutions in the coming years.