The New Year offers the perfect time for a fresh start and a renewed commitment to getting finances back on track after a season of spending — one where many Americans felt the effects of the pandemic on their wallets even before the onset of the holidays.
In fact, COVID-19 already has prompted consumers to start thinking differently about their finances. According to a consumer sentiment tracker, 59% say they are planning to make permanent changes to the way they spend and save due to the crisis. The findings went on to show that consumers’ top three financial concerns in today’s market include emergency savings (41%), having enough income in retirement (40%) and inflation (39%).
Here are three simple financial resolutions to help strengthen consumers’ financial outlooks in the New Year:
Review finances holistically. A budget will help you differentiate between needs and wants, enabling you to find areas to cut back to meet your financial goals, like retirement or emergency savings. Maximize online budgeting tools, calculators and other financial wellness resources available through your employer.
Prepare for the unexpected. Look into coverages like disability, accident and life insurance through your employer, or consider a life insurance policy. Also, commit to funding your emergency savings account as part of your budget. And don’t forget to think about how you would fund the cost of care if you or a loved one had a long-term care event.
Plan for the future. Start with your employer-sponsored retirement plan and commit to save at least up to the match. If you already meet the match, resolve to increase your retirement contributions each year, or with each increase in pay. Consider diversifying your portfolio with an annuity. Also, in-plan guaranteed income options can serve as a powerful tool to protect savings during periods of market volatility, while benefitting you when the market goes up.
In addition to these resolutions, consider meeting with a trusted financial professional who can help you identify solutions that best meet your needs.