[The following is a post by John Terrell, a personal finance and money saving enthusiast with a background in the mortgage industry]
A New Year signals the arrival of a new realm of opportunities and possibilities. Have you laid out your financial-related resolutions for the 2014 year yet?
Regardless of whether or not you’ve finalized the resolutions on your list, described below are 3 solid financial goals/resolutions to consider working in to this year:
1. Set a Goal to Establish or Bolster an Emergency Fund
The first item on our list of worthwhile financial resolutions relates to an emergency fund. If you’re not familiar with this type of financial account, it essentially is a place where your store anywhere from 3-12 months’ worth of your families expenses in a cash, or cash-equivalent account for short term emergencies needs. And, no, “emergency,” does not mean that buying a last minute birthday gift!
So, do you currently have an emergency fund?
If not, there is no time like the present to start contributing to one since the funds in this account will enable you to have a safety cushion in the event of an unexpected event so that you don’t have to rack up balances on your credit card.
If you do have an emergency fund, have you taken the time to analyze if you have an appropriate balance in the account? While the general rule of thumb is 6-9 months’ worth of expenses, it is often prudent to actually run a simulation analysis of the exact cash needs that your family would incur if a disaster were to arise and you lost your income.
2. Streamline Your Credit Cards
Another good financial resolution for the New Year is to analyze your current credit cards and credit card debt, if you are currently carrying a balance. For example, if you have good credit and a high-annual fee credit card currently that doesn’t pay any benefits, now might be a good time to look in to getting a cash back rewards credit card instead. In addition, if you have a fairly small amount of credit card debt that is being charged daily interest at a high rate, you might also want to investigate a credit card with a 0% balance transfer offer.
3. Create a Value-Based Financial Plan
The last financial resolution on our list today is to lay out financial goals for the New Year that are in line with you and your family’s life values and dreams vs. planning for only materialistic purchases/goals. This will ensure that you are using money in a way enables you to really get the most out of life.
Photo: LadyDragonflyCC – >;<