New Year’s is a time of reflection and to refresh, which is why so many people make resolutions and yet, more often than not they’re just false promises.
Almost half of Americans (45%) make resolutions every January, but only 8% keep them, according to research from the University of Scranton’s Journal of Clinical Psychology in Pennsylvania. There’s hope people will take financial resolutions more seriously in 2017 though: 36% of Americans are making money resolutions for next year, and 49% said they had achieved majority of their goals this year compared to 43% the year before, Boston-based mutual fund company Fidelity Investments’ annual resolutions survey found.
Good money management habits are critical for maintaining a preferred lifestyle and saving for the future, such as retirement, which many Americans do not currently do — or do well. Knowing how to balance numerous debts and becoming more financially literate can also lessen the likelihood of living paycheck to paycheck too.
Don’t miss: 11 money-saving habits that can cost you
Here are 7 resolution examples you can make, and stick with, to get your finances in order in 2017:
Your company has a financial plan — and so should you
It’s important to think ahead, but more than a third of Americans have no financial plan, according to a 2015 Northwestern Mutual Life Insurance Company study. “Not having a plan is a plan,” said Alexa von Tobel, chief executive of New York City-based personal finance site Learnvest. “It’s just a really bad plan.” It’s important to think about what life events you expect to see in the coming year — such as buying a home, or having a baby — and make financial goals attached to those plans. “Just being proactive about what’s going to happen in the year will allow you to be a smarter consumer,” said Todd Katz, executive vice president of group benefits at New York City-based insurance company MetLife.
Make a spending plan — just like you would do on vacation
Most people go on vacation with a set amount of money to spend, and they should do this at home too. Though budgets can seem daunting, and perhaps no fun, they are a helpful way of staying on track with your goals and not falling into debt. A budget doesn’t take much: write down and prioritize your goals, compare your expenses to your income and expect to be adaptable. One way to look at it is to use the 50/20/30 rule, says von Tobel, where 50% of your income should go toward necessities, such as a home, transportation and utilities; 20% goes to the future, such as retirement and college savings; and 30% is for lifestyle choices, such as going to the gym, eating out and traveling.
Automate your savings and kill your credit card debt
Putting your savings, and bill payments, on auto pilot is a great way to stay on top of your finances, experts said. It’s especially helpful for retirement saving: employees can automatically save a percentage of their pre-taxed salary through employer-sponsored retirement accounts, such as a 401(k) plan. For savings, many banks and credit unions can make automatic transfers between accounts, which means more money saved without thinking about it. Robo-advisers, which are automatic investing platforms, can also automatically invest money based on your preferences.
Use your smartphone to help you save and invest
There are apps available to help save through automation and loose change, such as Digit, which decides how much you can save after it analyzes the way you use your accounts, and Acorns, which invests the loose change from credit and debit card purchases into an investment portfolio. Websites such as Mint.com also help you see the big financial picture after linking all of your accounts and seeing how much you spend versus save. Seeing your spending habits is a wake-up call, and allows you to gauge if what you’re spending money on is worth it, von Tobel said.
This new office trend lets you lie down at work
Tech startup AltWork has created a desk that moves from standing, to sitting, to lying flat while you work. But will it catch on in workplace design?
Pay attention to your retirement accounts, and make them a priority
Too often people don’t take their retirement accounts seriously, perhaps because it’s too far away or because they can’t relate to their future selves. This is a huge problem for soon-to-be retirees, who might realize when it’s too late that they don’t have enough money to really retire. It’s never too early to get started saving for retirement, said Jennifer Putney, vice president of participant engagement in Newark, N.J.-based Prudential Retirement’s full service solutions.
Even starting with 1% of your salary, and increasing it every year, can be beneficial, but if you can meet employers’ matches for 401(k) plans, you should as it’s essentially free money, she said. If you have a retirement account, it’s important to do a check-up to ensure you’re properly invested and meeting your goals: 40% of Americans don’t know how their investments are allocated.
Acquaint yourself with employee benefits and know what you deserve
Employers are going out of their ways to expand their benefit offerings, Katz said, though not many individuals are taking advantage of it. You can save money by seeing what your employers offer, such as discounts for insurance, wellness packages to cover supplemental health products or exercise, or child care. Some companies are even beginning to help their employees with student loan debt.
Consider working with, or even consulting, a financial adviser
One way to stay on track, or at least get started, is working with a financial professional. The relationship you have, or will have, with an adviser, is expected to change in 2017, with the Department of Labor’s fiduciary rule coming in April, which will require advisers to be transparent about their fees and investment recommendations or face potential legal actions. Not all financial advisers are the same, and they don’t all charge the same either: some charge assets under management, which is a percentage of your money they manage, others charge a retainer fee, which is an annual fee. If you’re interested in working with a financial adviser, here are a few questions you can ask during the interview process.