​It’s that time again. A new year has arrived. For many, the new year is a time for resolutions. Weight loss is a popular resolution, as are goals related to education and career advancement. Unfortunately, most people don’t stick with their resolutions. A recent study found that nearly 80 percent of all resolutions fail by February.1

Perhaps you have some financial goals among your list of resolutions. That could be a wise idea. With some simple changes in habit and behavior, you can significantly improve your financial picture. The key, of course, is to stay consistent and stick with your resolutions.

Below are three financial resolutions to consider this year, along with tips on how you can stay committed. If you’re worried about your financial picture, make 2018 the year you take action.

Implement a debt paydown strategy.
Debt is a fact of life for many Americans. It can often be a helpful financial tool, especially when it’s used to fund large purchases for things such as homes, cars and education. However, although debt may be useful in certain situations, it can also have a corrosive impact on your financial stability.

The average American household has more than $173,000 of debt, $16,883 of which comes from credit cards.2 Credit card debt often has high-interest rates, which may make it difficult to pay off. Over time, that credit card debt can limit your ability to save and fund future goals.

There are a few steps you can take to pay down your debt. One is to call your card companies and ask for a lower rate. That will help you pay off the balance faster. Also, set up automatic payments for more than the minimum amount so you can chip away at the balance. Finally, consider debt consolidation into a vehicle with a lower interest rate. Remember, every dollar that doesn’t go toward debt is a dollar that can go toward other goals.

Save more money.
Saving is a struggle for many Americans. Even if you have good intentions to save more money, life can sometimes get in the way. You may feel like every penny of your income is needed for more urgent expenses, like child care or your mortgage.

However, you may be able to afford to save more than you think. For many people, the key to saving is taking the decision-making out of the equation. If you set your saving efforts on autopilot, you won’t have to make a decision about whether to use the money for bills.

One great way to do this is with your 401(k) plan. Set your contributions on autopilot so they’re deducted from your check. You can also set up automatic transfers from your checking account to a short-term emergency fund, an IRA or any other savings vehicle.

Develop and stick to a budget.

Finally, and perhaps most important, make 2018 the year you start using a budget. A budget can be the most powerful financial tool at your disposal. Unfortunately, nearly 60 percent of Americans don’t use a budget.3

You can use a wide range of tools to develop your budget, from apps to software to even a basic spreadsheet. No matter what you use, the elements of a budget should be the same. You’ll want to list all your income sources and all your expenses. Break your expenses into categories such as housing, auto, child care and others. Then track your spending so you can see where your money goes.

You can use your budget to make purchasing decisions. As you become more disciplined with your budget over time, you should start to see your expenses go down, which should then free up cash for savings and other goals.

Ready to implement your financial resolutions? Let’s talk about it. Contact us today at MasterPlan Retirement Consultants. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.

1https://health.usnews.com/health-news/blogs/eat-run/articles/2015-12-29/why-80-percent-of-new-years-resolutions-fail
2https://www.nerdwallet.com/blog/average-credit-card-debt-household/
3http://money.cnn.com/2016/10/24/pf/financial-mistake-budget/index.html

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