Now that the holidays are behind us, it is a great time to take a few minutes to start the new year off on the right foot. You may have made resolutions, but beyond that, there are some pro money moves you can make to improve your financial wellness.
If you want to set yourself up for financial success this year, here are some things you need to do today!
- Create or Update Your Budget
- Make a Bills Calendar
- Sign Up for Direct Deposit
- Set Up Automatic Savings Transfers
- Put Your Mortgage or Rent Payment on Autopay
- Automate Minimum Credit Card Payments
- Check Your Credit Report
- Take Advantage of Employer Benefits
- Make Sure You Are Investing
- Give Yourself an Insurance Checkup
- Treat Yourself
- The Bottom Line
Create or Update Your Budget
While you might not need a budget to get by unless you are a compulsive spender, having a budget is one of the best pro money moves you can make.
There are many apps you can use to create or update your budget. Some are free, and others cost money. By using these apps or creating your own budget using a spreadsheet, you can make sure you are growing your wealth and making progress toward financial freedom.
Make a Bills Calendar
In Fight Club, Tyler Durden famously said, “The things you own end up owning you.” I have written about how hard you have to work for your possessions once before, but I decided to take it a step further and find out how much time I have to work every month to pay bills.
Nearly 75% of the time I spent at work went toward paying for recurring bills, including rent, student loans, and utilities. That means only about ten hours every week were for the things I like to do, such as eating and entertainment.
You can also build a calendar like this. It can be one of the more eye-opening pro money moves that may motivate you to make changes to your spending to ensure you are using your money in ways that bring you the most joy.
Sign Up for Direct Deposit
Whether you regularly receive a paycheck, Social Security check, pension check, or anything else recurring, signing up for direct deposit whenever possible is one of the top pro money moves you can make.
With direct deposit, you never have to worry about losing a check. You also never have to worry about going to the bank or taking the time to complete a mobile deposit. The money just appears in your account on a regular schedule.
Plus, beyond being one of the must-make pro money moves, it’s more environmentally friendly since the check doesn’t need to be printed. It’s a win-win.
Set Up Automatic Savings Transfers
While you’re automating your deposits, take it a step further and automate your savings. You can do this by splitting your direct deposit between two accounts or setting up automatic transfers to your savings account on payday.
Many banks, particularly online-only banks, allow you to set a recurring transfer to your savings account from your checking account. Whether you want to save $20 per paycheck or $20 per month, you can set that up to happen automatically.
If you already have automatic savings transfers, this is a great time to challenge yourself to increase it. The more you can save, the better!
Put Your Mortgage or Rent Payment on Autopay
Almost all banks have online bill pay for free. Writing a paper check and mailing it to the bank with a coupon or mailing your rent payment is not considered one of the most ideal pro money moves when you can pay it automatically online instead.
Some banks, landlords, and HOAs have an online system that allows you to set up your payment there. When you use your bank’s bill pay, you have 100% control and visibility over when payments are made and sent.
Whatever you do, always make sure you have enough in your account to cover your payments when they go through to avoid fees.
Automate Minimum Credit Card Payments
If possible, you should always pay your credit card in full each month. This is one of the most recommended pro money moves at any point during the year. However, there is an easy way to build a safety net in case you forget to check your statement and make your payment.
Every major credit card company allows you to schedule your credit card payments automatically. You can choose a specific amount, the entire bill, or the minimum payment amount.
If you schedule the minimum payment amount, it will only go through if you have not already made your minimum payment. If you forget to make your payment, the automatic payment will execute, and you will avoid late charges and missed payment fees on your credit card.
It is a great way to cover yourself just in case you forget to make a payment.
Check Your Credit Report
One of the top pro money moves to make at the beginning of the year is checking your credit report. I check my annual credit report through Experian and have found issues in the past.
The first problem I found was my address. I worked through the easy automated menu to fix the problem. The second issue is a bit more complicated. I opened a line of credit at one of my banks, and they opened two instead. I did not authorize two accounts, so two accounts should not be on my credit report.
To fix that, I had to talk to a real live person. I spent about 20 minutes on the phone, and confirmation that the issue was resolved came in 60 days.
By fixing issues with your credit report, you can increase your odds of getting approved for loans and getting the lowest interest rates.
Take Advantage of Employer Benefits
One of the common things many people overlook is all the benefits they get from their employer. A paycheck and paid vacation are nice, but those are only the tip of the iceberg.
Are you saving for retirement? If not, check out your employer’s 401(k) plan. It helps you in the long run if you want to retire, and it also helps lower your tax liability.
Don’t overlook a lesser-known way to save money via your employer: the Wellness plan. Many employers now offer wellness plans that span from incentives for healthy living habits to gym subsidies to free checkups.
Just ask your HR department if they offer this type of program to employees. If they don’t, there is no harm in asking them to start.
Make Sure You Are Investing
People often get nervous about investing their retirement savings to the point where they might avoid doing it. If you fall into this category, there is a mutual fund for you called either a target date or destination fund. Each fund is tailored specifically to the investment needs of someone with a retirement goal of 20xx.
Target date funds take out the guesswork in investing and asset allocation. As you age, the fund will be tailored to your risk profile. In your 20s, the funds invest almost exclusively in stocks. Later on, it moves toward fixed-income (bond) securities and funds. As you near retirement, your investments are slowly moved into cash and treasuries, the safest investments.
If you are trying to decide what to put your 401(k) or IRA investments into, look at funds like this. It is easier to have someone else pick stocks and mutual funds for you.
Give Yourself an Insurance Checkup
It is wise to shop around when renewing or finding a new insurance policy to ensure you get the best coverage at the lowest rates.
One of the top pro money moves you can make right now is to take an inventory of your insurance policies, including:
- Car insurance
- Renter’s insurance
- Homeowner’s insurance
- Life insurance
- Pet insurance
Then, get quotes from competitors to see if you can get better coverage at a more affordable rate. Don’t be afraid to switch insurers if a different option offers you a better policy.
Also, make sure that you actually have the coverage you need. If you don’t, update your policies to include more (or less) coverage based on your current situation.
While this may not seem like one of the typical pro money moves, when you have a financial goal you want to achieve, treating yourself as you reach certain milestones helps you stay motivated. Whether you have general savings goals or New Year’s resolutions, make sure to establish success points to keep you on track along the way.
For example, if one of your goals is to save $5,000, make each $1,000 increment a success point. Then, find an affordable way to celebrate. You could buy yourself that shirt you’ve been eyeing or treat yourself to some ice cream from your favorite shop.
The Bottom Line
These pro money moves can help you set yourself up for financial success in the new year and beyond.
That said, these tips can be implemented anytime during the year. Regardless of when you decide to improve your financial health, you can use some (or all) of these strategies to help you achieve financial independence.