Are you looking for ways to give your finances a fresh start in 2015? Start with these 10 financial resolutions. They'll not only help you change your financial habits, they'll give you a fresh way of thinking that will help you make better financial decisions all year long.
1) Take stock
You can't make meaningful financial changes in the New Year unless you know where you are right now. So first get a snapshot of your net worth. Add up your assets (what you own); then subtract your liabilities (what you owe). This will show you whether you're in the plus or the minus, and will help you plan and prioritize your savings and spending. It also provides a benchmark so you can measure your progress throughout the year.
Next, look at your cash flow over the past year. What came in each month? What went out? If you regularly spent more than you earned, take a step back and decide what changes you'll make to stem the outflow.
2) Set goals and prioritize
With your net worth and cash flow in mind, you can now set some new goals. What do you want to achieve this year? Whether you want to improve savings, pay off debt, start a college fund or help a family member, prioritize those goals so that you have a clear idea of where to direct your money first. Whatever your other goals, don't neglect regular contributions to your retirement accounts.
3) Spend mindfully
Now create a budget that will support your new goals. Itemize your monthly expenses, both essential and nonessential. Make sure that any top priorities such as savings or debt reduction are line items on your list of essentials. When you make a spending decision, make it in the context of your goals. And if you spend beyond your budget, do it with a conscious understanding of how you're going to make adjustments to your future expenditures so you don't fall into more debt than you can handle.
4) Open up communications
If you haven't regularly included your spouse or partner in your financial decisions, do it now. Share your priorities, budget, and documents as appropriate so that everyone in your family is onboard and willing to do their part. You might even set up regular financial meetings to make sure that everyone stays up to date and motivated. It's easier to change habits when everyone involved supports one another and is working toward the same purpose.
5) Plan for the unexpected
To protect yourself and your finances, make sure you have the right type and amount of insurance. Health insurance is a must, as well as automobile insurance if you have a car and homeowner's insurance if you own your home. Life, disability and renters insurance are others to consider, depending on your circumstances. Likewise, consider an umbrella policy -- especially if you have substantial assets.
Build an emergency fund in an easily accessible account, ideally with enough cash to cover three to six months' of essential expenses in case of a job loss or illness. Don't touch this money except in an emergency.
6) Invest like a pro
Review your portfolio at least quarterly and rebalance yearly to make sure you're still investing according to your goals and timeline. If you didn't do a 2014 year-end review, start 2015 by looking at your asset allocation and making changes to keep your investments on track. Take advantage of online tools and quarterly reports and statements. If your investments have grown beyond your own comfort level in managing them, seek out a financial advisor.
7) Set up support systems
Make day-to-day financial management easier on yourself by putting as much on automatic as possible. Use auto pay for recurring bills. Consider automatic deposits to your savings and retirement accounts.
And don't forget about personal support systems. If you need more reinforcement as you try to change financial behaviors, consider setting up quarterly meetings with an advisor or other financial professional who can provide added insight.
8) Optimize your resources
Use the new year as a motivation to review all employee or government benefits that may be available to you. Are you eligible for a pension from a former employer? Could you get better insurance coverage though a spouse's plan? If you're approaching retirement age, think carefully about the best time to file for Social Security benefits.
It's also a good idea to periodically review the professionals you work with -- your accountant, attorney, financial advisor -- to ensure that they're still meeting your needs. Don't hesitate to make a change if needed.
9) Create your legacy
I think of my estate plan as a way to support the people and causes that I care about most. You may not need a complex plan, but don't put off creating at least a simple will, especially if you have minor children. Beyond that, think carefully about how you would like your assets to be distributed and work with an attorney to prepare the appropriate documents. An advance health care directive is also a necessity to protect both yourself and your loved ones.
10) Stay involved
Resolutions one through nine will put you on the path to a more financially secure 2015, but to stay there, you have to commit to remain involved. Stick to your budget, keep striving for your goals, talk to your family -- and measure your success. Most of all make these resolutions not only for the New Year, but for the rest of your life.
Here's to a happy and financially rewarding New Year!
Looking for answers to your retirement questions? Check out Carrie's new book, "The Charles Schwab Guide to Finances After Fifty: Answers to Your Most Important Money Questions."
This article originally appeared on Schwab.com. You can e-mail Carrie at firstname.lastname@example.org, or click here for additional Ask Carrie columns. This column is no substitute for an individualized recommendation, tax, legal or personalized investment advice. Where specific advice is necessary or appropriate, consult with a qualified tax advisor, CPA, financial planner or investment manager.
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