ATLANTA - It's January. It's the month of resolutions. Lose weight. Get healthier. But don't forget to put your finances on that list, too.
Start off this month by ticking a few things off that will give you a financial direction for the rest of the year.
Let's look at our 'to do' list then talk with a financial advisor about them.
2018 Financial 'To Do' List
* Review Statements
* Increase 401k contribution
* Pay off credit cards.
Review all of your statements. Beef up your 401k since the government made a recent change here. Tell ya about that in a minute. And, finally, pay off those credit cards this year.
Now that looks on its face like things you already know. But let's deep dive a little, starting with credit card pay-offs. The rule of thumb is to pay off your highest interest card first. That's what makes, technically, the most financial sense. But, Lisa Brown, at Brightworth, says she wouldn't do it that way. Here's why.
"I take a different perspective. I say pay off those small balances first. It's the same as dieting. If you make small progress or see yourself shedding a couple pounds a week, you're more likely to keep going," say this wealth management specialist.
I totally agree. So many of us are motivated by success.
Now, let's look at your 401k contribution. You know you should put as much as legally allowed in there. Well, guess what, the government says you can put more in there this year. Lisa Brown explains.
"2018 is the first time in three years the government has increased the limit as to what you can save in your 401k plan. And it's going up by $500. Everybody should make it their goal to save that $500. When you break it down we're only talking about saving an extra $10 a week."
And that brings us to reviewing statements. We're talking all of them: your credit cards, checking and savings. Get lower interest cards. Lisa Brown also has an interesting tip about a savings account. Move yours, she says.
"I recommend you don't set up your savings account at the same bank you have your checking account. It's too tempting to move it. I like using online banks because of these savings accounts because they pay a higher rate of interest."
So don't get overwhelmed. Just do one thing. Start with one thing.