Overconsumption and overspending are hallmarks of the holidays, but a new year is ripe for getting back on track.
Some of the most important financial tasks don’t require a lot of time or expertise, and checking them off your list now can jump-start you in the right direction.
Here are six things to do today for a successful 2020:
1. Open a savings account for a goal
There’s no better time to open a high-yield savings account than when you’re saving for something specific, whether it’s a trip abroad, wedding expenses, or your first home. There’s no downside to a high-yield savings account – your money is safe from market risk, earning up to 200 times more interest than your checking account, and accessible when you need it .
Keeping your money for a specific purpose separate from your day-to-day spending account can also help reduce impulse spending and make it easier to track progress toward your goal. Make the whole process automatic by logging into your payroll provider or checking account and setting up regular, automatic deposits or transfers to your new savings account.
2. Increase your pension contribution
It’s easy to stick with the status quo when it comes to retirement savings, especially if you automatically contribute through a company plan like a 401(k) and don’t actively transfer money between accounts every month. But if you challenge yourself to increase your savings rate right now, you won’t regret it.
A small percentage increase shouldn’t feel like a blow to your portfolio, but it will have a positive impact on your investment earnings going forward. Experts recommend contributing up to 10% to 15% of your income to investment accounts for retirement, depending on your retirement needs and goals. Wherever you are now, try to increase your carryover rate by 1% to 3%, then revisit it in six months or sooner if you get a raise.
3. Call a financial planner
A new calendar year is a great time to call your financial planner or meet one for the first time. Not only will this encourage you to reflect on the financial milestones, accomplishments, and challenges of the past year, but you can also set a plan for the year ahead and beyond.
Before your first meeting, think about your goals for the next 12 months and write down any specific questions you have so you can get started.
SmarAsset’s free tool can help you find a financial planner near you »
4. Get life insurance
There’s no better time to get a great deal on life insurance because you’ll never be younger and healthier than today. If someone other than you depends on your income to live on – a spouse, child, parent or sibling – you should seriously consider buying life insurance so that they have financial support in your life. absence.
Even if you don’t have any financial dependents but do have significant debts, a life insurance policy can help you pay off those debts when you die so your creditors don’t go after other assets. that you leave behind.
If you opt for term life insurance — which covers you for a set period of time, usually between 10 and 30 years — you’ll likely pay between $25 and $50 a month, depending on the amount of coverage you get and your health status. health.
5. Get disability insurance
Disability insurance is something too many people overlook. It’s human folly to believe that something bad won’t happen to us – until it does and we regret not being prepared for it.
If you were injured or sick tomorrow and couldn’t work for a while (or never again), would your financial stability suffer in any degree? If so, then you should have disability insurance to replace your income.
Policygenius can help you compare disability insurance policies to find the right coverage for you, at the right price »
6. Pay off a credit card balance
The first step to creating substantial wealth is to become free from consumer debt. If you have credit card debt with a double-digit interest rate, paying it off should be high on your priority list.
Put aside any shame or self-doubt and come up with a concrete plan, whether it’s looking into a balance transfer credit card; put extra money toward your monthly payment; use a vacation windfall or tax refund to make a large lump sum payment; or consolidate your balances with a personal loan.