The new year is a point of reset, often serving as a catalyst to encourage new, more favorable actions and behaviors for both individuals and business. It’s an opportunity to start anew and replace the “old with new” and the “bad with good,” at least when it comes to habits. And, this year may be no different, but we all know the reality of keeping those new habits in place can also prove to be difficult.
So, let me encourage a delightful read by Charles Duhigg, the Pulitzer Prize-winning columnist and author of The Power of Habit, on the New York Times bestseller list. Reading it can be a great start to foster growth and launch the habits you hope to see more of in the year(s) ahead.
Then let’s rifle through this Top 7 List of changes you can implement immediately that can quickly and swiftly help you graduate to a higher tier of financial success:
- Start using your 401k or other retirement plan to maximize your tax- deductible contributions, or, exercise the Roth 401k (many employers now offer) and put away aftertax dollars.
- If you’re already using a retirement plan, increase your participation. The maximum contribution you’re eligible for in 2018 has increased to $18,500 and if you’re age 50 or older, you’re still eligible for a catch-up provision of $6,000 annually. That allows a total of $24,500 contributed in the year. (By the way, if your employer contributes a hypothetical 5% to your plan, don’t contribute only to achieve the match … go for your maximum. The free money is great, but remember you’re putting money away to be able to retire not just to achieve a minimum match).
- Increase the principal payment to your mortgage monthly. You may not even notice the small difference when deducted from your checking account, but the life of your loan will diminish and you’ll achieve your payoff much faster.
- If you have children and want to help them with future college expenses, launch and fund a College Savings 529 Plan (it allows opportunity to achieve tax-free growth for college expenses).
- Review the interest you earn in your checking and savings accounts. If the yield is shockingly low and you have significant balances in cash, consider short-term bond alternatives and/or money market funds that may generate more income (if, of course you’re willing to accept more risk).
- Identify your financial goals, and if they’re genuine, make your actions reflect that which you hope to achieve.
- If you have credit card or other revolving debt, pay it off. Even people that have significant assets can at times surprise me with debt on credit cards. Check the interest rate, whatever it is- you’re probably rewarding your bottom line by paying it off.
This short list can affect the trajectory of your financial future in a significant and meaningful way. Just like cutting late-night snacks from your daily diet can lead to a slim physique, these fine-tuning adjustments can radically affect your financial economic household for the better and lead you to an exciting financial future.
The information contained within this article is based on information available and believed to be accurate at the time it was prepared. It reflects the opinions and beliefs of the individual author and not necessarily those of Wedbush Securities.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named representative, broker – dealer, state – or SEC – registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.