As the new year begins, it’s time to make resolutions, start saving more, and spend less. However, working towards your goals can be difficult, especially if you don’t know what to do or where to start. To help, we spoke with the experts who shared the best financial tips for the new year.
Below are the top 26 financial tips to stay on top of your finances in 2019.
1. Pay Off Your Debts
Judith Corprew, Executive Vice President – Chief Compliance & Risk Officer, Patriot Bank
Start paying off your student loan, personal loans or credit card debts. Many people are accumulating their debt but paying only the minimum payment. Consider paying a little extra when you can. This will slow down the interest accumulating monthly and, in the end, keep you from spending more money than you have to.
2. Focus on a Net Worth Goal
William Lipovsky, CEO, First Quarter Finance
Instead of saving some money here or there or maybe picking up an odd job, focus on the big picture ― your net worth. Saving a few bucks feels good but understand that no one gets wealthy just by saving money. It’s earning money that moves the needle in a great way. To get you going with smaller goals, you should:
- Make sure all of your bills are the lowest they can be; get rid of any recurring bills that displease you
- Fully fund the appropriate retirement accounts
- Sell anything you own that doesn’t spark joy and try to live a minimalist kind of life
- Learn a skill that will increase your earning potential
- Network with high net worth individuals because who you’re around is who you become
3. Check Your Credit Score
Kathy Longo, Founder & President, Flourish Wealth Management
Your credit score paints a picture of your current financial status. Everyone should know their credit score and review this number periodically. It is free and easy to review this number on a monthly basis as many credit card companies and spending apps like Mint.com will often post a snapshot of your credit score to your online account. It’s best to start the year by knowing what your credit standing is and work to improve on that throughout the year.
4. Learn to Create & Use a Simple Budget
Kevin Gallegos, Senior Vice President of New Client Enrollment, Freedom Debt Relief
Learn to create and use a simple budget that is based not on numbers but on goals. To make budgeting work, it needs to tie into what you want to do in your life. Therefore, before you deal with the numbers, set and write down goals and, if you’re married and/or have a family, do so with your spouse and family. Maybe the goals range from taking a family vacation to being able to retire at a certain age to making sure you have time to train for a marathon. Write the goals down, and then build the budget around them. It will likely mean modifications, but you have to be flexible. After all, whether it’s driving or budgeting, it’s hard to get somewhere without knowing where it is you want to be.
5. Strive for Exponential Business Growth
Zack Mikaloff, Founder & CEO, Orumfy
The worst thing you can do in your business is to stop striving for growth. The thing is so many of us get so comfortable with our current cash flow that we don’t even consider the possibility of expansion. No matter what business you might be in there is always a possibility for growth. You might think you have reached the financial peak in your business but trust me you haven’t. For starters, lay out a plan of the different areas of your business and see what can be improved to give you the best ROI and allocate money towards that to get the quickest return and rinse and repeat the process.
6. Decide How to Spend Your Tax Refund
Josh Zimmelman, Owner, Westwood Tax & Consulting
How you spend your money now, can reduce the next year’s tax bill. Avoid using your refund to make a down payment on a big expensive item unless you’re sure you’ll be able to pay off the balance. You don’t want to use your refund to put yourself into debt. If you think you’ll be itemizing next year, making a tax-deductible charitable contribution is a great way to reduce your tax liability. You can also use your refund to make a contribution to your IRA, which could potentially result in greater deductions for the following year. If you foresee a shift to self-employment during the year and are anticipating owing next April, you might want to stash that refund money away to help pay your future tax bill. Receiving a tax bill at the end of a year of self-employment can be a huge shock to those used to having taxes withheld during the year.
7. Use Credit Cards You Can Benefit From the Most
Beverly Harzog, Consumer Finance Analyst & Credit Card Expert, U.S. News & World Report
If this is the year you want to become a savvy user of rewards credit cards, then look at your spending habits and decide what types of rewards credit cards you’d benefit from the most. If you decide to use several rewards credit cards, then set up a tracking system with an Excel worksheet or other online credit card monitoring tools. There are different sites that do this, and they can help you keep track of your points and miles and staying aware of any expiration dates that might be creeping up.
8. Review Your Life Insurance Policies
Matt Schmidt, CEO, Burial Insurance Pro
Starting the new year off and reviewing your finances should include a review of your life insurance portfolio. As you get older, you may no longer need specific policies as your financial objectives have changed in time. Perhaps you need a different type of life insurance policy or additional coverage. Making sure your life insurance matches your current needs and financial situation is always a great way to start the new year.
9. Keep Track of Your Net Worth
Alissa Todd, Wealth Advisor, The Wealth Consulting Group
Just because someone is making a lot of money, doesn’t automatically make them financially successful if they are not able to retain that money. One tool that you can use to measure your own financial success is your net worth statement, and you can use this to measure your personal financial progress. This gives you a snapshot of your overall finances. Calculate your net worth by adding all your assets and then subtracting your liabilities or debts to know where you stand financially.
10. Protect Your Business & Investments With Insurance
Tom Ayres, Partner, Daigle & Travers Insurance Agency
The fastest way to undo all of your business success and hard work is failing to protect your investments with the proper insurance adequately. A good insurance agent should be able to assist you in assessing risks that are prevalent to your business, building a loss prevention plan, and providing the proper insurance coverage. Make it your goal in 2019 to hire a strong agent and reassess your insurance program and protect those assets. Also, if you do one thing in 2019, be sure to obtain a good cyber liability policy for your business. 60% of businesses that experience a cyber attack ultimately go out of business because of it. Small business is under attack, and you need to be prepared
11. Review Your Health Insurance Needs
Mike Stahl, Executive Vice President & Chief Marketing Officer, HealthMarkets
If you are a small business owner, you should understand the importance of meeting with an insurance agent who can review the many options related to health insurance ― whether it is for you and your family, as the business owner, or for your employees. The right thing to do for yourself, your family, your business, and employees is to review the various options available thoroughly, be it level-funded plans or group policies. Talk with a professional who can share cost carriers and structure types so that you know you are getting complete and unbiased perspective.
12. Exercise Strict Self-discipline When it Comes to Your Finances
Byron T. Deese, Retirement Consultant, Glass Jacobson Financial Group
Discipline yourself to take time regularly to do your budget correctly and most effectively. Involve your family members when it comes to budgeting, especially your spouse and children. Try to live on 70% of your net income. Set 50% for home and transportation expenses, and 20% for food and emergency expenses. Set aside 10% for savings and investments, 10% for retirement fund, and 10% for charity.
13. Work With a Wealth Manager
Rick Kollauf, Director of Business Advisory, BMO Wealth Management
There will come a time when your retirement account or the savings you have developed outside the business is in need of managing. Business owners should consider that they are good at what they do and are not necessarily skilled in managing wealth. Many business owners think that since they are entrepreneurs, they must have a high-risk tolerance and end up losing more than they are saving just as they are planning to retire. Some believe that anything in their retirement account or savings should be in cash so that it is liquid and not subject to risk. They may not even be keeping up with inflation and leaving earnings or growth on the table. Start working with a reliable wealth manager this year to help you manage the resources you will later rely on.
14. Prepare for the Tax Season
Tom Conlon, Head of Client Services, Betterment for Business
When we say “tax season,” most people’s minds jump immediately to April. However, if people wait until April to start assessing their tax health, they’ve missed out on four months of preparing to help maximize their tax profile. Begin evaluating your paycheck ahead of time to determine the right amount to withhold to cover all your taxes.
15. Build Your Emergency Fund
Yuko Kawamoto, Finance Staff, Founder’s Guide
People who are financially successful know how to expect the unexpected. If you have not started building your emergency fund yet, this year should be the time you prioritize it. You should aim at least six months’ worth of your living expenses in your emergency fund, so in case something unfortunate happens, you are financially ready to cover the costs.
16. Review All Your Active Finances
John Cavanaugh, CFP, CRPC, President, Cavanaugh Financial Group
This is a great time of year to think about money. Often, people are so eager to make changes that they miss the most important first step, that is to see what you already have. Take some time in 2019 to pull together all your active finances. Start with the obvious: bank statements, credit cards, investment accounts, and retirement plans. Move on to the not-so-obvious: Social Security statements, insurance policies, legal documents, and tax returns. Gathering these items into one place ― electronic or physical files ― will create a powerful tool to see where you stand today. Gaps and areas that need attention will start to present themselves naturally. If necessary, get some input from a certified financial planner in your area.
17. Evaluate Your Cash Flow & Spending
Nicholle M. Overkamp, Retirement Planning Specialist, CEO, & Founder, Wilcox Financial
At the start of 2019, you should take time to evaluate at your cash flow and spending. The more you start tracking your money, the more control you will have over growing it. Are there areas you can improve? How much of your money is disappearing because you can’t figure out where it’s going? Often, we know our fixed expenses and income, but the frequency of small purchases can throw us off. When you begin tracking, see if there are extra funds you can start saving toward a specific goal or using to pay down debt. Ask yourself if the items you are purchasing or spending money on truly bring you joy, or are they a simple convenience, act of being unprepared, or simply a poor habit.
18. Create a Financial Plan to Align With Your True Goals
Jesse Mecham, CEO, YouNeedABudget
Often, when we’re stressed about our finances, it’s because we’re not sure our money decisions are aligned with the life we want to live. We’re spending money on everything from unexpected or surprise expenses to unresearched expenses that we probably don’t need. Or worse, we’re paying off debts, which is the worst because the more you’re on the hook for past decisions, the less you’ll be able to put toward today’s priorities. Take a hard look at your priorities for yourself and your business and develop a financial plan or budget that truly serves what’s most important. Allocate funding to the line items that move the needle and pare down miscellaneous expenses that don’t contribute to your overall well-being or bottom line.
19. Open Four Separate Saving Accounts
WenFang Bruchett, Founder & Bankable Strategist, Bliss Finance
Open four separate accounts to save your money. One is for your net income, second for your groceries, third for other household expenses, and the fourth one as an emergency savings fund. Make sure to set aside at least 20% of your income into your emergency account, 10% for your groceries, another 10% for other expenses, and the remaining 60% goes to your net income account.
20. Use a Digital App or Software to Monitor Expenses
Ashvin Chheda, ChFC, CLU, President, Opes One Advisors
Consider using tracking software to track your spending. Understanding where you are spending help you develop the right strategy for savings. There are free software applications to help track your spending like Mint.com. Also, many banks and credit card companies also provide that as part of their service. Having a better sense of where you are spending your money provides financial confidence.
21. Start a Side Hustle That You’re Passionate About
Russell Barbour, Personal Finance Expert & Founder, Unconventional Prosperity
One of the best financial tips for 2019 is to start a side hustle that you are passionate about. Many people spend several hours per day watching television or doing other unproductive things. Instead, why not use this free time to start a freelancing business that will help you earn more income? If you put one to three hours per day into building your own home business, you might be surprised at how quickly it grows. A side hustle lets you pursue something that you love and diversifies your income streams. There has never been a better time to become a freelance online entrepreneur.
22. Invest in Agriculture
Chris Rawley, CEO, Harvest Returns
Invest in real assets like agriculture. Agricultural production is one of the oldest, most profitable investments available. With each passing year, the world must feed more people with less arable land. Global demographics will continue those trends as the Earth’s population grows by another three billion people within the next few decades. In a time of financial uncertainty in the stock market, there is no better asset to own than income-producing farm, timber or ranch land. These investments provide tangible yields from naturally produced products and have beaten the returns from other asset classes for years.
23. Take Advantage of Your 401(k)
Roger Lee, CEO, Human Interest
Maximizing your 401(k) is one of the best financial moves you can make, no matter your age. The earlier you start saving, the longer compound interest has to work in your favor. As American companies move away from the pension system and the future of Social Security is uncertain, the responsibility for saving for retirement is falling on the individual. A recommended contribution of at least 10% is a good place to start, but your goal should be to save between 15% to 20%. Start contributing an amount you’re comfortable with, even if 10% isn’t possible today. You can make this easier by setting up automatic contributions to your retirement plan. By contributing from your paycheck automatically, you won’t miss out on any savings, and you’ll be setting yourself up for a financially secure retirement.
24. Create a Zero-based Budget
Ashley Patrick, Master Financial Coach & Owner, Budgets Made Easy
A budget is a foundation for all of your financial goals. A zero-based budget helps you stick to your plan and make it happen fast. Your budget is what will get you to your short-term and long-term financial goals for 2019. Once you have a zero-based budget, it’s time to start saving. This includes saving money for emergencies and yearly expenses and cutting expenses like eating out, cable, and things that are not necessary.
25. Consider Consulting a Tax Professional When Preparing Your Tax This Year
Jonathan Millican, CFP, Financial Advisor & Director of Planning, Bridgeworth LLC
This will be the first year the Tax Cuts and Jobs Act of 2017 (TCJA) will impact your tax return due to its passage in December 2017, and applicability to the 2018 tax year and beyond. Many who itemized deductions in the past will no longer do so because of an increased standard deduction amount for single and married taxpayers. Gone are your personal exemptions and parents will be happy to see an increased child tax credit. Many will see their tax rate reduced, but not all. So, pay attention when preparing your tax return this year and consider consulting a tax professional to ensure you are not overlooking any key details.
26. Leverage Home Sharing to Boost Your Financial Income
Peter Allen, Managing Director, Agoda
You can start to leverage home sharing to boost your financial income, save money, and upgrade your overall financial health. You will be able to cover at least half of your mortgage, pay for upgrades and renovations on your properties, and even fund your children’s college education or your own retirement by renting out your homes, or extra rooms, to guests. All this while working independently and meeting travelers from around the world.
The Bottom Line
If you want to improve your finances, there are things you should do and sacrifices you should be willing to make. It takes time to save money and build wealth, but it’s what you do every day that will eventually provide the results that you want to see in the long run. Make sure to use the above financial tips from the experts to build better financial health.