With the new year starting up, it’s a good time to get things off to a good start and set the tone. Last year was tough for major parts of the country, especially weather wise. Hurricane Harvey for instance, left over three hundred billion dollars worth of damage. The blazing fires in California that has left thousands of people homeless. These are just a couple of examples. More than ever, it’s becoming more apparent that one needs to have back-up plans for our back-up plans. With these 4 tips, you can be a bit more prepared with your finances.
4 Financial tips for the new year:
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If you have family, now would be a good time to get that life insurance policy you’ve been thinking about. In this precarious world, it is more important than ever to make sure that your family will be provided for in case anything happens to you. Don’t assume that your current policy is the cheapest one either. Did you know that most insurance companies spend more money to acquire new customers? New customers are given discounts at the expense of their existing customers who get rewarded for their loyalty with ever increasing premiums? It doesn’t make any sense. Check around and make sure to find out if you can get lower premiums by switching companies. By combining policies with the same company, you can get even bigger discounts. It might be worth combining your life, auto and home/rental insurance policies.
Contribute to your 401k and/or Roth IRA:
More than 75% of employees don’t take advantage of retirement plans such as 401K. Reasons vary. Some just don’t understand it while a lot of people say they don’t have the spare money. If your company offers a 401k plan, you should definitely invest a portion of your pay. This can set you up for a nicer life in retirement. This post will answer all your questions . It can be a bit of an adjustment in the beginning, but it is ultimately very rewarding. You can always increase your contribution slowly so it’s not a big hit all at once.
Check your tax deductions:
The new year is also a good time for checking out your W-4. Make any corrections that is needed to make sure the right amount of tax is being withheld from your pay. This will prevent any big surprises come tax time. If you are not having enough money deducted, you may owe the IRS money. If you have too much money being deducted, you will get a refund, but of course it’s a tax free loan for the government. Money that you could have used during the year (like adding it to your 401k deduction 🙂 ). It is a fine balance, but one that is needed.
Curb your spending:
This is perhaps one of the hardest things to do, especially when your friends seem to be out spending all the time. Instant gratification that you have nothing to show afterwards except empty pockets. If you cannot afford to keep up with your friends, don’t. Find other ways such as inviting them over for a cookout/movie night at home. Spending hard earned money on overpriced food robs you of money that can go towards your emergency savings fund.
How do you plan on making better financial decisions in the new year?