Thanksgiving quickly flew by and the next holidays are right around the corner: Christmas and New Year’s. We typically spend this time contemplating some of the goals we’d like to achieve in the coming year and thinking back to whether or not we met last year’s goals.
It’s never too early to start planning ahead to make drastic changes that will finally get your finances back in order. In fact, now is the perfect time to do so, because many of us should be receiving tax refunds and/or employment bonuses.
To help get 2016 off to a great start, here are five personal finance resolutions we should all make for the New Year:
1. Pay off high interest debt first!
If you have lingering credit card debt in 2016, your main priority should be paying high interest rate accounts first. Gather all your statements together and figure out which account has the highest rate. There are quite a few tools out there, like ReadyForZero, that can help you create a payoff plan to finally get rid of those nasty debts.
2. Consolidate your bills.
A personal loan can help you consolidate your debts and get you on track to finally become debt free. By consolidating your debt with a personal loan, you’ll have one manageable payment for two to five years. Your payments will never increase, and you’ll have some peace of mind knowing that there’s a light at the end of the tunnel.
3. Clean up/fix your credit report.
When’s the last time you checked your credit report for inaccuracies? Grab a copy of your credit report at AnnualCreditReport.com and examine it to see if any trade lines are reported in error. You’re allowed one free credit report each year from each of the three major bureaus (Experian, Transunion, and Equifax). After you’ve reviewed your report, take the appropriate steps to finally rebuild your credit by either paying down debt, paying off accounts in collections, or applying for a secured credit card.
4. Double-check your investment portfolio.
A lot has happened with the market in 2015. This is the perfect chance to revisit your investment portfolio to make sure it’s on track to achieve your financial goals. Has your risk tolerance changed in the past year? Do you have an increased need for liquidity? Are you contributing the maximum amount allowed to your 401(k)? These are all questions you should ask yourself prior to 2016.
5. Evaluate your business finances.
If you own a small business, what are you hoping 2016 will mean for your company? If you're looking to grow, it might be worth it to consider taking out a small business loan to help reach your New Year's goals. Business owners often think taking out a loan means business is bad when, in actuality, most business owners use outside financing to push their business forward. If you're sick of being stagnant, it might be time for a fresh influx of cash. Either way, make sure to sync up with your accountant to ensure your company can handle the debt. And if you don't have an accountant, getting one should definitely be an additional resolution for the New Year. Finances are the lifeblood of any small business — you need to make sure you have an expert helping in that department.
Rod Ebrahimi is a member of the DailyWorth Connect program. Read more about the program here.