A lot of resolutions, including financial resolutions, made for a new year only stay for a short time. It is very certain that a lot of people who promised themselves to stay out of debt by doing their own things themselves would not be able to keep those promises. Credit cards would not be far away from their hands to buy the next impulse item that catches their attention. Resolutions require a change in behavior. This is what most people find it difficult to do. However, there is still an opportunity to improve one’s financial position within a short time.
These are some steps that could be taken to help keep financial resolutions:
1. Order free credit reports
According to the law promulgated in 2003, once a year, Americans have the right to credit reports from the major credit bureaus. The problem is that most Americans are not taking advantage of this free credit reports service. Getting a credit report and examining it would help in identifying any errors which could work against one’s chances of obtaining loans.
2. Go for medical examination
Carrying out medical tests helps in quickly identifying health problems that could lead to high health care costs in the future. The good thing is that thousands and thousands of Americans have the opportunity of getting medical examination free of charge. That will take place in this new year 2011. With effect from January 1, two medical tests will be for people through the Medicare system. The law also makes it a requirement for health care insurance companies to provide cover for issues like tests for cholesterol, screening for cancer without making charges for deductible.
3. Your beneficiaries should be updated
According to estate planning lawyers, failure to update beneficiaries often causes proceeds from life insurance to go to the wrong person. In worst cases, such proceeds can even go to the ex-spouse.
The type of accounts that beneficiaries should be made aware of are:
- Individual retirement account (IRA)
- Credit union plan account
- Disability insurance policy
- 401k plans
- Retirement plans for self-employed people
4. Increase contribution for 401k
For the year 2011, taxes for Social Security will go down from 6.2% to 4.2%. The effect of this is that all people with a job will enjoy an increment with effect from January 2011. A good way to make use of the increase in income is to increase your 401k contributions.
5. Rebalancing investment portfolio
From time to time, make sure you examine your investment portfolio to ensure that they are still in line with your set goals. A lot of people do not do this. According to a report issued by Hewitt Associates, in the year 2009, only 16% of owners of 401k rebalanced their investment portfolios. A failure to do rebalancing could result in you over-investing in certain areas of the economy, which could have a negative effect on your total investment in future.
Financial resolutions are very good for living a debt-free life. It takes discipline to be able to live and achieve the dreams you have set for yourself and your family in the new year 2011.