At the beginning of each year, and regularly after that, it may be a wise idea to take stock of finances and make some changes to help improve your financial life. Here are five resolutions you may make to increase financial independence and work toward building wealth.
- Review Subscription Services
The number of people who have cut the cord of cable in favor of subscription streaming options has tripled in the last seven years. But while these streaming services may seem less costly than cable, having half a dozen or more may add up quickly. At $10 to $20 per month each, subscription services might go unnoticed on your monthly statements. It is a good idea to make a list of your subscriptions, the renewal dates and the cost. Analyze which ones are essential and the ones that might be paused or canceled next year.
- Manage Your Interest Rates
Interest rates for everything from mortgages to auto loans remain low but may rise in the future if inflation continues. Now might be a good time to investigate lowering the interest rate on your auto loan, researching credit card companies to see about 0 % APR offers, or refinancing your mortgage to lower your interest rate or shorten your term.
- Audit Your Investing Costs
Few people have the ability to state the plan administration fees or expense ratios associated with their 401(k)s, investment retirement accounts and other investments. Paying a 1 to 2 % fee on an investment may require it to outperform options with lower fees to have the same return. It is worth looking at the expense ratios of your investments to see whether there are more inexpensive ways to access the same underlying investments.
- Begin Estate Planning
No matter how young you are, it is never too early to make provisions for what happens after you are gone. Having a written will, life insurance, or even prepaid burial expenses may ease the burden on your surviving loved ones. This strategy mitigates the risk that your dependents have financial hardship in your absence. Your estate plan does not need to be complex; you may even be able to create one yourself using templates or legal forms online. Thinking through these tough choices during a time of reflection may help you maintain confidence no matter what the coming year holds.
- Set At Least One Financial Goal
Whether you want to increase your savings rate, finally take that long-awaited vacation, or get a new job in the next few months, setting one or more concrete financial goals may give you something to work toward.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.
The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal advisor.
This article was prepared by WriterAccess.
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