Clean Up Your Finances in 2019


Clean Up Your Finances in 2019

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It’s kind of ironic that a season of decadence is often followed by one of self-discipline and improvement – from glittery holiday parties and overspending to budgets, diets and New Year’s resolutions. The holiday and debt hangover in January is often more painful than we like to admit.

Here are my financial to-dos for maximum money success. If you follow this, I promise next January you will have much less anxiety and more to celebrate!


1. Write down your New Year’s resolutions


And post them somewhere you’ll see them regularly, such as on your fridge. Consider turning your most important resolution into an “oath” to codify the commitment to yourself. For example, “I promise to bring lunch to work three days a week.” Another great way to stick to your resolution? Share it on social media to hold yourself accountable.


2. Calculate your net worth


In January so you can start the year fresh. And remember – your net worth does not equal your self-worth. This is everything you own minus everything you owe.


3. Do a fresh budget


I always say a budget is not a four-letter word like a diet. It is what is coming in and what is going out. Make sure it is not in the red, which means more is going out than coming in.


4. Consider opening a Christmas club-type savings account


At the beginning of the year so you don’t get a debt hangover after the holidays. Originally pioneered during the Great Depression, Christmas clubs were financial accounts people added cash to throughout the entire year, which they then used for holiday gifts down the road.

While these accounts are less popular today, you can create your own Christmas club by automating savings each month, ideally in an interest-bearing account. If you save $75 a month, you’ll have $900 at the end of the year (or even more, if you manage to earn some interest). Match this to what your holiday spending budget is, and next holiday will be a breeze.


5. Start gathering tax documents


Like W-2 and 1099 forms and receipts for your charitable contributions, so you’re prepared when it’s time to start doing your taxes. Taxes are right around the corner. Do them early if you can.


6. Check your credit report


With Credit Karma, you can check your credit reports from TransUnion and Equifax each week for free. Additionally, you can check your report from each of the three main credit bureaus once a year for free with your credit scores and reports for.


7. Aim to have your credit cards paid off in full


By the end of the month. Whether you’re still dealing with a holiday debt hangover or simply have additional debt in your life, try giving yourself a deadline to work toward.


8. Rebalance your 401(k)


Once a year is a good time to see if you are out of balance from your original goals. For example, if you are 60 percent stocks and 40 percent bonds and stocks had a good year, you might be 65 percent stocks and 35 percent bonds, so they will have to be rebalanced.


9. Increase your savings plans


This could be your employer plan at work or your own emergency fund savings, or both. I recommend raising it 1 percent a year.


10. Meet with a CFP® professional


If you haven’t started retirement planning or tying your financial goals to your life goals, there is no better time than now to start. You can find someone here.


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Cary Carbonaro

Cary Carbonaro is an Award Winning, International known Personal Finance Expert. She is a Certified Financial Planner professional with an MBA in finance, with over 25 years of experience in financial services.