It’s a new year, so time for a new you, right? If you’re like many, you’re making New Year’s resolutions that will improve your health and life. Let me help you out and offer you some financial resolutions. Before you balk at the idea or before you go on a strict spending budget, let me remind you that resolutions are not a do-or-die promise — they are goals. You achieve goals by making changes until you find the key that gets you closer to your goal.

Let’s say your goal is to be in a better financial position by the end of the year than you are today. That overarching goal may include some or all of the smaller and specific goals like paying down debt, preparing for retirement, or being prepared for the next financial event that happens in your life.

I always recommend that you start with a budget. If you’re going to build a house, you need to start with a good foundation. The purpose of the budget is to know where your money is going. Make a list of what money you have coming in and how much is going out. You’ll almost always have typical housing costs like mortgage payments, homeowner’s association dues, utilities, etc., but you should also record one-time purchases for the annual garden, how much you pay for lawn care maintenance, annual mosquito prevention treatments. Once you know where your money is going, it is easier to find places to curb your spending should you need to.

Your next step is to save more for retirement. When was the last time you increased your 401(k) contribution? If you are only saving just enough to get an employer match, consider increasing your contributions by 1%. These contributions generally come out of your paycheck pre-tax, so the chances of you missing less than a 1% difference in your take-home pay is minimal. Maybe this year, you explore the Roth 401(k) option your employer offers. Small changes here will be amplified by time and compounding returns.

Finally, make sure that your family is protected with insurance and an estate plan. Take a look at your coverage for your homeowners and auto policies. If you’ve made changes to your home and autos in the last few years but haven’t updated your insurance coverage, you may be underinsured. Furthermore, life, disability, and umbrella policies can all protect your family’s lifestyle and help ensure that they can continue with their planned goals should something devastating happen. Also, take a close look at your estate plan. Many investors avoid planning their wills, health care directives, powers of attorney, etc., because they don’t like to face their own mortality. The best time to start estate planning is when you are healthy. Otherwise, your loved ones may be making critical decisions during a crisis without a roadmap.

Controlling and improving your finances takes time, patience, and a little bit of grace when poor decisions are made. The moves you make today will affect how well you are prepared for what lies ahead.

William G. Lako, Jr., CFP®, is a principal at Henssler Financial and a co-host on “Money Talks”—your trusted resource for your money, your future, your life—airing Saturdays at 10 a.m. on AM 920 The Answer. Mr. Lako is a CERTIFIED FINANCIAL PLANNER™ professional.

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