Photo credit: Create a budget regardless of your income level, experts advise.
The most common financial resolutions for the new year include paying off credit card debt and student loans and generally getting fiscally organized.
Alexa von Tobel, founder and CEO of Learnvest.com, said money-related resolutions are the second most common new years goals for Americans after weight loss aims.
We spoke with von Tobel and Manhattan-based financial planner Russell Bailyn to put together a list of financial resolutions you should adopt for 2013 and a look at how to go about accomplishing them:
1 Consult an expert
Learnvest.com is currently offering a free consultation with a financial expert.
“There are so many different places that you might not be protected or covered, where it’s really important to get a second set of eyes,” von Tobel explained.
An expert “will literally help you figure out what your goals should be,” she said.
2 Create a budget
Bailyn said everyone should create a budget, regardless of their income.
“Budgets aren’t just for people living paycheck to paycheck,” he said. “They are a way to face your actual spending and figure out how you could be saving more.”
3 Develop a savings plan
The easiest savings method is an automatic one, Bailyn said.
“Consider setting up an after-tax account with a mutual fund company and having some small amount of money, each month, automatically deposited into that account,” he recommended. “You may be shocked at the extra savings you’ll accumulate.”
4 Launch an emergency fund
Both experts recommended putting aside an emergency fund.
Von Tobel calls it a “freedom fund,” and recommends saving up nine months worth of expenses. So if your expenses are $2,000 a month, save $18,000 and put it away for an emergency, such as job loss or an illness.
Bailyn suggested setting a goal of three months first, because nine months might be tough for some people, he said.
5 Check your credit score
You can get free credit checks and reports by visiting Annualcreditreport.com, Creditkarma.com and elsewhere.
“Know where you stand,” von Tobel advised.
6 Review your insurance coverage
Make sure you’re properly covered, especially if you’re recently married and/or have children.
“In the world of unpredictable weather and human behavior in which we live, having adequate coverage on our homes, cars and lives should be a priority,” Bailyn said.
7 Increase your retirement savings
According to von Tobel, you’ll likely need $1 million to survive on when you retire. Women need to save even more, because they retire with two-thirds of the assets of men and generally live much longer, she said.
8 Spend less
Negotiate or consolidate at least one bill, von Tobel advised, and cancel at least one subscription.