Trouble Keeping Your New Year’s Resolutions?

Have you made New Year’s resolutions in the past, knowing that you won’t stick to them? Do you want to feel like you’re making progress with your financial stability, but know that you don’t have the willpower or stamina for big changes? Don’t feel bad! According to Stanford University, of those people who make New Year’s resolutions, only 8% actually follow through with them. We make a lot of hollow promises to ourselves that we’ll lose weight, spend less, get organized, exercise more, save more, quit smoking, eat better, be nicer, stop procrastinating, etc. At least you know enough about yourself to recognize that your resolutions probably won’t stick. If you still want to feel like you’re making progress, read on.

I can’t help you when it comes to exercise or dieting – success with those requires sheer willpower. There are some things you can do though to help gain control of your finances that don’t take much effort. The list below contains 5 financial action items that you can complete in 2017. The only willpower involved is forcing yourself to sit at a computer for a few minutes each. None of them requires you to change your habits. They’re totally doable, and there’s nothing to stick to – once they’re done, they’re done.

Small successes like these might motivate you to take on a larger challenge, like setting and sticking to a budget, or cutting back on your spending so you can save or invest more. You might even be ready to set some New Year’s resolutions in 2018 and have a better chance at making them work!

#1 – Make Sure Your Beneficiaries Are Correct

This one isn’t so much for you, but for your loved ones. Most firefighters, police officers, and paramedics qualify for a death benefit if they die in the line of duty. Many also carry life insurance or have pension benefits that are payable to surviving family members. It would be heartbreaking if your benefits went to the wrong person if you happened to die. It has happened more than once where a fallen public servant’s ex-spouse received a payout while their new spouse got nothing because the public servant failed to update their beneficiaries.

If you have had a change in life circumstance – a divorce, a marriage, more children, a death – make sure to update your beneficiary or survivorship information to match what you want to happen should you die. Update your life insurance, any death benefits (federal, state local, union, etc.), your retirement accounts, bank accounts, pension, and anything else you can think of. Much of this can be done by logging in to each organization’s or company’s website and navigating to your account or profile. Sometimes you may have to visit an office or sign and return an affidavit, but it’s not hard. If the worst should happen, your family will thank you.

#2 – Increase Your Retirement Contributions

If one of your New Year’s resolutions is to save more, then this one counts as a resolution. You’ll be saving all year long with only a few minutes of effort in January!

As I’ve said before, the earlier you start saving for retirement, the better off you will be. Put the power of compounding interest to work for you and contribute more money to your retirement account(s) now. Your 401(k) is an easy opportunity. You can have the amount deducted from your paycheck and sent straight into your account. I increased my contribution by 5% back in October. I haven’t really noticed that I’m not getting that money in my paycheck, and our quality of life hasn’t changed a bit.

The process really only takes 5 minutes. I logged in to my account, changed my percentage, and the rest was done for me. My plan administrator contacted my employer, who redirected part of my pay. Simple. Since the contribution is automatic, you won’t have to remember to do it each month. The only time willpower is needed is if you’re tempted to take a 401(k) loan. In that case, think hard about whether you really need that loan. That’s right – you probably don’t.

#3 – Check Your Credit

I wrote about checking your credit not too long ago. I check mine using annualcreditreport.com, the only site authorized by the government and all 3 credit reporting agencies. You are entitled to a free credit report from each of the 3 agencies once a year. I spread mine out and get one every 4 months. This enables me to spot changes quicker than checking all 3 one time a year. I also recently added a security freeze after two fraudulent accounts were opened in my name.

Checking your credit report can help you spot fraud, identify inaccurate information, and see who has had access to your report. It is also important to know what’s on your credit report so you’re not surprised when its time to apply for a mortgage or other loan. Additionally, more and more employers are using credit reports to screen prospective employees. Knowing what’s on yours ahead of time might help prepare you explain to an interviewer about a recent foreclosure or bankruptcy, for example.

Gaining access to your report is easy. Follow the link above, answer some questions to help them identify you, and see your report. I save mine as PDFs so I have a hard copy to refer back to (you only get access to the online version for a short time).

#4 – Buy/Reevaluate Your Life Insurance

One of my New Year’s Resolutions is to make sure I have enough life insurance. I want to make sure my family is taken care of in case I get hit by a bus. My employer supplies me with a small policy for free, but it doesn’t cover nearly enough of what my family would need if I died. I can buy additional insurance through the same plan, but it is more expensive than if I bought a standalone plan by myself.

I recently shopped around for a term life policy, and found that Policy Genius was easy to use and offered competitive rates from some top insurers. Using their life insurance estimator takes just a few minutes and gives you a good idea of how much insurance you need. You can also use the calculators at Life Happens, a nonprofit that helps folks make sure they’re covered.

My quote for a million dollar (which is far more than we need), 20-year policy was around $400 per year from an A+ rated insurer. I’m on the young end of the spectrum and I’m healthy, so that’s a pretty good premium. To buy a policy, you just need to fill out the application and submit to a basic health exam. Many times, the nurse or technician will come to your home or office for the exam. It can’t get any easier than that, and you have the peace of mind knowing that your family is taken care of!

#5 – Fund a FSA or HSA

This one will take a little more time to accomplish. Its up to you to do the math to figure out which is better for your situation. Is a lower deductible, higher premium plan and an FSA right for you? Will a higher deductible, lower premium plan paired with an HSA save you more money? It depends on how much you spend on health care, and is different for everyone. You can use the calculators at Connect Your Care to help you decide. Either way, you save money on health care.

A Flexible Spending Account is a great way to save money on health care (child care FSAs are also available). The maximum you can contribute in 2017 is $2600. An FSA is funded with pre-tax money, so you never pay tax on that portion of your income. Once you tell your employer how much you want to put into your FSA, they’ll usually fund it right away and issue you a debit card. To pay for it, your employer deducts an equal amount of pre-tax money from each of your paychecks over the course of the year.

The Affordable Care Act allows plans to roll over a portion of the money for use in the next year (up to $500), and/or give employees a grace period for submitting expenses (usually March 15 for expenses incurred in 2016). Some plans don’t exercise these options, and if you don’t spend the money by the end of the year, you lose it.

If you have a high deductible health insurance plan, you may qualify for a Health Savings Account. To qualify, you must have at least a $1300 deductible for yourself, or a $2600 deductible for your family. The HSA offers a triple tax advantage when the money is used for qualifying health care expenses. Your contributions are from pre-tax income, you are not taxed on earnings, and you don’t pay taxes on qualified withdrawals. Any money you don’t use rolls over to the next year, with no limit on the amount you can save. Many people use this to save for their health care expenses in retirement, when expenses will likely rise.

Because high deductible plans are cheaper for the employer, many are offering incentives to get employees to enroll. My employer puts $600 into an HSA for employees who chooses a high deductible plan and opens an HSA.

Still Want To Make New Year’s Resolutions?

Do you like to use the new year as a motivator for change and as a chance to start fresh? If so, then by all means, go for it! I’ve already enacted 3 resolutions – I didn’t even wait for the new year! I started running again, increased my 401(k) contributions, and consolidated our bank accounts to help us better track our spending. Hopefully I can be part of the 8% and keep these things going throughout 2017!

What are some of the things you want to change in 2017? Will you make New Year’s resolutions? Are you part of the 8% or do your resolutions fizzle out by February?

Happy New Year!