New Year’s Financial Resolutions and Ways to Pursue Them

At the turn of each new year, we often take a look at our personal, professional and financial lives and resolve to make some improvements. Many people review their own financial picture at year end, and then make New Year’s financial resolutions for the following year, whether it’s getting out of debt, creating an emergency fund or saving for retirement.

Doing some additional planning and goal setting can help you make more informed decisions about managing your money. Here are some things to consider:

Set goals with a specific purpose in mind and regularly check in on your progress

Our latest Merrill Edge Report(1) found that many Americans are saving money. Many respondents report they are contributing more to their savings and investments than they spend in a year on their mortgage, travel, student debt, or dining out. That’s the good news. However, many also admit they have no monetary goals in mind for major life milestones, including having a baby (67 percent), getting married (64 percent), putting a down payment on a house (51 percent), and even retiring (50 percent).

Knowing what your goals are and how much money you need to save for them is important. Once you define your short and long-term goals, you should regularly check your progress to see how you are doing. Then, if you are not progressing towards your goals, you can consider making changes to your strategy, like increasing the monthly amount you save. Saving even a small amount can make a difference.

Put “found” money to good use

You could potentially save hundreds – perhaps even thousands – of dollars by cutting out services you rarely or never use. Could you eliminate your home phone line or some of your subscription services to save money each month? Using “found” money or extra cash from a raise, bonus, tax refund or gift can help you move towards your long-term goal of financial stability. Consider using any excess funds to increase your 401(k) or IRA contributions, start an emergency fund, or contribute to a 529 education plan.

Simplify your credit cards

Having multiple credit cards can make it not only harder to track and control spending and stay within your budget, but also easier to build up high-interest debt. If you have several cards, evaluate which ones work best for you – like the ones with the lowest interest rates – and make them your primary cards. Keep the other cards for emergencies but avoid building balances on them.

Tackle debt

The beginning of a new year is a great time to start tackling debt. First, list all your debts, document how much you owe, the interest rate you pay on each loan or credit card, and how much you can devote to reducing your debt each month. Next, define your goals and timeline, and calculate how much you need to pay each month to meet those goals. Once you begin paying down your debt, you might want to focus on paying the highest-interest debt first, since this is the biggest financial drain, and make at least the minimum payments on everything else. Then start planning for your next financial goal to help keep your level of debt manageable.

There are plenty of resources out there to help you feel more informed and empowered. If you need help, consider involving a financial professional. Getting a firm grip on your finances feels great and can help you keep your News Year’s resolutions and make more informed decisions as you pursue your financial goals.

(1)For more information about the Merrill Edge Report, visit www.merrilledge.com/report

Merrill Edge Survey Methodology: Convergys (an independent market research company) conducted a nationally representative, panel-sample online survey on behalf of Merrill Edge Sept. 27-Oct. 13, 2018. The survey consisted of 1,034 mass affluent respondents throughout the U.S. Respondents in the study were defined as aged 18 to 40 (Gen Z/Millennials) with investable assets between $50,000 and $250,000 or those aged 18 to 40 who have investable assets between $20,000 and $50,000 with an annual income of at least $50,000; or aged 41-plus with investable assets between $50,000 and $250,000. For this purpose, investable assets consist of the value of all cash, savings, mutual funds, CDs, IRAs, stocks, bonds and all other types of investment accounts such as a 401(k), 403(b), and Roth IRA, but excluding primary home and other real estate investments. We conducted an oversampling of 300 mass affluents in Atlanta. The margin of error is +/- 3.1 percent for the national sample and about +/- 5.6 percent for the oversample market, reported at a 95 percent confidence level.

Merrill Edge is available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), and consists of the Merrill Edge Advisory Center (investment guidance) and self-directed online investing.

Banking products are provided by Bank of America, N.A., Member FDIC and a wholly owned subsidiary of Bank of America Corporation.

Investment products: 

MLPF&S is a registered broker-dealer, Member SIPC and a wholly owned subsidiary of Bank of America Corporation.

? 2019 Bank of America Corporation. All rights reserved.

AR838XLF