The New Year is the perfect time to make a few positive changes. If you’re looking for a resolution you can get a head start on, try making a financial plan for your family! Having an organized game plan will set your family up for a year that’s prosperous, happy, and secure.
Read on to learn how to get your family’s finances ready for the best year yet.
Reflect on Last Year’s Spending
Maybe you had a frugal year with very little spending, or maybe you went a bit overboard on a luxurious family vacation—or something in between. No matter what kind of year you had, it’s time to do a little reflection as you reach the end of your calendar. As you review your spending, take note of necessary versus indulgent spending patterns.
Word to the wise: This step isn’t always the most fun, and it can even be a little scary. That said, we promise it’s a positive step that will pay off down the line.
Prioritize Paying Off Debt
We aren’t reinventing the wheel with this piece of advice—of course, you have to make payments towards your outstanding debt. But there’s a difference between tepidly chipping away at debt and actively paying it down. Consider the following strategies for making this the year you substantially decrease your debts:
- Pay more than your minimums
- Research credit cards with better interest rates (and then transfer your balance)
- Consider refinancing your mortgage
- Try the snowball method by paying off your debts from smallest to largest
Invest in Investing
Investing your money wisely is one of the best ways to secure your family’s future. For most people, dipping their toes into the investment waters can seem scary. But don’t shy away from it. Investing is easier and more accessible than you think.
Stocks, bonds, and mutual funds are great ways to get started, and you can build your portfolio to be as high or low risk as you want, depending on your goals. To get started, set up a meeting with a professional, or look for online services that offer financial advisor tools.
Break Out the Piggy Bank (for You and Your Kids!)
Okay, you don’t need to put pennies into a literal piggy bank (though this is a fun way to involve your children in the financial process) but the concept is still applicable. The New Year is a great time to get serious about saving.
Whether you want to build an emergency fund (highly recommended!) or squirrel away extra cash for a surprise family getaway, you’ll be surprised at how much money you’ll have by this time next year if you start saving early.
Try your hand at these savings resolutions:
- Take it day by day – Think of it this way: committing to saving $10 a day is a lot more manageable than putting several thousand dollars into your savings account all at once. If you set (and stick) to a daily goal, you’ll accumulate a healthy savings fund this year.
- Cut down on subscriptions – Use the New Year as motivation to sift through your monthly subscriptions and cancel anything you don’t truly need. Don’t worry, we’re not suggesting you cut ties with Netflix (we are human, after all), but you may have subscriptions that just aren’t worth it anymore. Time to re-evaluate!
- Combine your resolutions – If your goals include getting in shape or living more sustainably, for example, you can get more bang for your buck (literally) with dual-pronged annual resolutions. Incorporate money-saving initiatives into whatever your goals are, like eating out less (both for calories and cash flow) or taking public transportation to work (for the environment and your economics).
Cheers to Your Finances
The clock hasn’t struck midnight just yet, so there’s still time to get a financial plan in place. Ring in the new year knowing you’ve got your affairs in order and a solid roadmap for the future—now that’s something we can all cheers to this New Year’s Eve!