Financial Resolutions for the New Year

1. Re-examine your cash flow for 2016.  Look through your credit card charges, receipts, and income sources.  Take a good look at what you spent in 2016.  Are you happy with the amount spent on take-out dinners?  Are you racking up big numbers at Nordstroms, but aren’t sure what you have to show for it?  Do you have multiple recurring charges for subscription services (apps, websites, etc.) you really aren’t using?  Begin 2017 with a blank slate and modify your habits from Day One.  Think of how much more you can save (or how much debt you can pay off) just by cleaning up a few bad habits.   What’s stopping you?
2. Simplify, simplify, simplify!!  Look at all your credit card, debit card, bank accounts, and investment accounts.  Do you have duplicate accounts serving the same purpose, or ‘orphan’ accounts sitting stagnant for years?  Re-evaluate why you have them, and if they suit your needs today.  If they serve no distinct purpose, shut them down.  Transfer funds to an existing account and simplify your financial life.  In the process, you may save yourself some of the account fees that keep sneaking their way out of your account!
3. Adjust your tax withholding, if necessary.  If you generally receive a significant refund or have a substantial balance due at tax time, make the changes early in the year to work toward that zero balance/refund situation.  Request a new W-4 form from your employer for both federal and state tax deductions.
4. Thoroughly review your credit report, and clean it up as necessary.  Experts believe as many as one in four of us have correctable errors on our credit report.  There are three major credit reporting services, and federal law allows a FREE credit report from each of the reporting companies every 12 months.  Be wary of most companies offering free credit reports – the official site for requesting free credit reports is www.annualcreditreport.com/  A great tip is to request a report from one company, then four months later request a report from another, then four months later request a report from the third company.  This gives you a much more up-to-date picture of your credit than if you request from all three at the same time, then must wait 12 months before looking at an updated version.  
5. Add one month’s pay to your emergency fund.  Most financial planners recommend an emergency fund of 12-18 months’ take-home pay.  This should be held in accounts which can be easily converted to cash without penalties.  Retirement accounts, CDs, and other restricted accounts are not options.  If you have an emergency fund, increase the balance by one month’s pay during 2017.  If you do not have an emergency fund, make it a priority for 2017!
6. Maximize your employer’s contribution to your 401(k).  Any dollars your employer contributes to your 401(k) are ‘free’ money to you!  If your employer will match contributions up to 6% of your pay, be sure you are contributing at least 6% of your pay.  Otherwise it is money left on the table by your employer.   

The toughest part is taking that first step and committing to change.  Following through is empowering, and proof that you can take charge of your finances.