‘Tis the season for New Year’s resolutions. As we ring in 2015, many will vow to lose weight, get organized or learn something new, and according to StatisticBrain.com, the third most popular resolution is to spend less and save more. This year, Allstate is encouraging its customers to stick to their resolutions and take the time to tone up their finances.
“In order to spend less and save more, people need to evaluate their priorities, set goals and stick to them,” said Bill Kavanaugh, senior vice president, Allstate Financial, and CFP® CERTIFIED FINANCIAL PLANNER™. “Remaining diligent throughout the year, not just immediately following the New Year, may mean you should seek advice from a financial professional who can help you develop a comprehensive annual game plan.”
Based on the conversations Allstate agency owners and staff have with customers, Kavanaugh offered five tips to improve your financial future:
1. Do Your Homework. There is a wealth of valuable, and free, information about managing your personal finances available on websites, in books, newspapers and seminars. A financial professional can assist you in understanding how this information relates to your personal situation and suggest products and services you can consider to help you achieve those goals. Referrals from friends or family, and organizations such as the National Association of Personal Financial Planners (www.napfa.org) or the Financial Planning Association (www.fpanet.org), can assist you in finding fee-only or commission-based financial advisors. For information about specific products, such as life insurance, ask for a referral from professionals you currently deal with and trust – such as your auto/home insurance agent.
2. Set Goals. As with any New Year’s resolution, it’s helpful to set specific goals and a timetable to achieve them. Rather than trying to make progress on everything at once, prioritize your goals every year so you can focus on the two or three most important. For example, make a date once a year for an annual life insurance checkup to double check that the amount and type of coverage is right for your current situation.
3. Think Long Term. Retirement may or may not seem far off, but a happy, well-funded retirement won’t happen without long-term preparation – and many people today retire earlier than expected and without adequate savings. If your retirement savings efforts are falling short, consider consulting with a financial professional who can review with you your current financial and insurance needs and recommend actions you can consider to help you reach your goals.
4. Find Small Savings. Identifying small opportunities for money-saving in your normal habits can be beneficial when trying to save cash for a financial emergency or find money to invest. Small changes, such as packing your lunch rather than eating out, skipping the coffee shop and brewing your own, or cutting back on premium cable channels can add up to substantial monthly savings. Stow your extra dollars into a savings or money market account as an emergency nest egg, or “dollar cost average” by putting a set amount of money each month into a stock or bond fund. In addition, routinely save some or all of your financial windfalls: tax refunds, birthday gifts and bonuses. The money, interest and dividends will add up over time.
5. Tackle Credit Card Debt. Few things in life are more stressful than a pile of credit card bills you can’t pay off. Danger signs include habitual late payments and trouble making the minimum payments. Many resources can help you develop a plan to reduce or eliminate your expensive credit card debt. Government websites, such as the National Foundation of Credit Counseling (www.debtadvice.org), and informational websites, such as DebtorsUnite.org, offer helpful information. Beware of “get out of debt quick” companies that make promises that are too good to be true. Try to avoid over-using your cards by storing them far away from your wallet, phone and computer so that you’re less likely to make impulsive credit card purchases. Better yet, carry cash instead of cards because you’re less likely to overspend if you’re handing over cold, hard cash.
“Preparing for your financial future can be a daunting task, but following these simple tips can make a big difference. The best way to improve your financial health and be prepared for the future is to start today,” Kavanaugh said.