The beginning of a new year is always a great time to start shoring up your financial habits. I’ve always been a horrible procrastinator, but even I find it easier to start a new undertaking when there is a new beginning such as New Year’s Day looming. Why not take advantage of this day that begs for new resolutions to turn your financial life around?
If this sounds like a good plan to you, I’ve got five good financial habits you should consider starting this year:
Budgeting – If you haven’t ever done it before, now is the time to start. Begin by listing your expected income for the month. Then subtract your fixed expenses that must be paid. Finally, don’t forget to divvy up the leftover money into discretionary spending categories like entertainment. Keep track of your spending throughout the month so that you can start the process all over again at the beginning of the next month.
Eliminating Debt – Debt can do awful things to any family’s financial situation. If your family is mired down by debt, you would do well to start working a plan towards getting rid of it. Begin the new year making debt payments a priority in your budget.
Saving for Future Purchases – Keeping new debts out of your life is as admirable as paying off existing debt. Begin making regular deposits to a savings account to allow you to buy those big-ticket items that you usually finance. Appliances, furniture, and even cars will be much more enjoyable when they aren’t attached to monthly payments.
Retirement Planning – Don’t leave retirement planning until you are actually approaching retirement. Instead, start saving for it now. You’ll find that you’ll have many more options in your golden years if you make planning a priority now.
Purchasing Life Insurance – Although no one likes to think about their deaths or the deaths of their loved ones, the responsible thing to do is to purchase life insurance before you ignore the topic. Having insurance allows you to be assured that your family will be cared for even if you aren’t able to take care of them yourself.
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{ 3 comments… read them below or add one }
You mentioned life insurance… I just wanted to say Disability Insurance maybe equally as important. Have a friend who just found out he has cancer and doesn’t have any short term disability to cover his lost wages. It’s really a good idea and brings peace of mind at a small cost. My company charges like $5-10 for it per month. Good list though!
Saving money is on everyone’s minds these days! Definitely buying some term life ins. is important. I’d say creating a budget is #1! You have to track every penny you spend…..I just wrote an article about that….
Five great habits to put into our daily lives.
I dislike the tying it into New Year’s, because I think this feeds on peoples’ bad habit of procrastination. If there’s something good you want to implement in your life, why wait till New Year’s? Also, if it doesn’t go well, I think it makes it easier to give up when its tied to the holiday.
But they are great ideas