10 Ways to Get Your Financial Life in Order in the New Year

Now that the New Year has arrived, many of us reflect on the previous year, reevaluate our goals, and set resolutions to improve different areas of our lives. One of the most crucial areas to focus on is your financial health. Organizing your finances now can set you up for a year of prosperity, reduced stress, and better financial decisions. And, at CoSource Financial Group, we are here to help. Keep in mind these 10 practical steps to get your financial life in order as we embrace the New Year:

1. Review Your Budget. Start by reviewing your current budget or creating one if you don’t have one in place. A good budget accounts for your income, essential expenses, and discretionary spending. Use this review to track where your money is going and make adjustments where necessary.

2. Set Clear Financial Goals. Set specific, measurable, achievable, relevant, and time-bound (SMART) financial goals for the year. Whether it’s saving for a vacation, paying off debt, or building an emergency fund, having clear goals gives you a roadmap to follow.

3. Automate Savings. Make saving a habit by automating it. Set up automatic transfers to your savings account each payday. This way, you’re consistently putting money aside without the temptation to spend it elsewhere.

4. Pay Down High-Interest Debt. Prioritize paying down high-interest debt such as credit cards and payday loans. These types of debt can quickly accumulate, costing you more in the long run. Consider using methods like the snowball or avalanche approach to tackle your debt effectively.

5. Build or Replenish Your Emergency Fund. Aim to save at least three to six months of living expenses in an emergency fund. This safety net can help you avoid going into debt when unexpected expenses arise, such as car repairs or medical bills.

6. Check Your Credit Report. Request a free credit report from each of the major credit bureaus and review it for accuracy. Ensuring that your credit report is error-free can improve your credit score and save you money on interest rates when borrowing.

7. Cut Unnecessary Subscriptions. Take a look at your monthly subscriptions and decide which ones you can live without. Whether it’s a streaming service you rarely use or a gym membership you’re not taking advantage of, cutting unnecessary subscriptions frees up extra cash.

8. Invest for the Future. If you’re not already investing, now is a good time to start. Open or contribute to retirement accounts like a 401(k) or IRA, or explore other investment opportunities such as index funds. Compound interest works best the earlier you start.

9. Review Your Insurance Coverage. Evaluate your insurance policies (health, life, auto, home) to help ensure you have adequate coverage. Life changes, such as marriage or the birth of a child, may require updating your beneficiaries or increasing coverage.

10. Plan for Taxes Early. Don’t wait until the last minute to start thinking about taxes. Gather your tax documents and consider contributing to tax-advantaged accounts, such as an HSA or IRA, to reduce your tax liability. Be sure to consult a tax professional for advice.

Getting your financial life in order as the New Year starts will empower you to make informed and intentional decisions with your money. By budgeting, setting goals, paying down debt, and investing wisely, you’ll be in a strong position to achieve financial success in the year ahead. Feeling overwhelmed or intimidated? Give us a call at CoSource Financial Services, and we’ll gladly walk you through how to review your current situation and to make plans for improvement.

Investments are subject to market risks including the potential loss of principal invested. Past performance is not a guarantee of future results. Retirement plan withdrawals may be subject to taxation and penalties when withdrawn early.