If you’re someone who likes to make resolutions on New Year’s Day, you already know how hard it is to stick to them. Here are four resolutions that can help increase your financial fitness and hopefully inspire you to stay committed to them in the new year.

An added bonus is that the steps below are also steps we suggest that all investors take as part of creating a financial plan, the foundation, we feel, for any investor looking to own, plan for, and then take the steps needed to save, invest, and reach their financial goals.

New Year’s Resolution 1: Create a budget

Saving and investing during your working years, if you stick with it, should lead to a rising net worth over time, enabling you to achieve many of life’s most important goals. Creating your own budget and net worth statement can help you build your road map and stay on track. Here are steps that can help:

• Pay yourself first.: At a minimum, be sure to have a high-level budget with three things. How much you’re taking in after taxes? How much you’re spending? How much you’re saving?
• Calculate your personal net worth annually: It doesn’t have to be complicated. Make a list of your assets (what you own) and subtract your liabilities (what you owe). Subtract the liabilities from the assets to determine your net worth.
• Project the cost of essential big-ticket items.: If you have a big expense in the near term, (education / home maintenance etc.) put the money aside. Increase your savings and treat that money as spent.
• Retired? Invest your living-expense money conservatively: Consider keeping 12 months of living expenses in a short-term interest-bearing account.
• Prepare for emergencies.: If you aren’t retired, we suggest creating an emergency fund with three to six months’ worth of essential living expenses, set aside in a savings account.

New Year‘s Resolution 2: Manage your debt

Debt, depending on how you use it, is neither inherently good nor bad—it’s simply a tool. For most people, some level of debt is a practical necessity, especially to purchase an expensive long-term asset to pay back over time, such as a home or car. However, problems arise when debt becomes more of a burden than a tool. Here’s how can manage to stay in control of your debt-load.

• Keep your total debt load manageable: Don’t confuse what you can borrow with what you should borrow.
• Eliminate high-cost debt: Try to pay off credit-card debt and avoid borrowing to live. The cost of consumer debt adds up quickly if you carry a rolling balance.

New Year’s Resolution 3: Prepare for the unexpected

Risk is a part of life, particularly in investments and finance. Your financial life can be upended by all kinds of surprises—an illness, job loss, disability, death, natural disasters, or lawsuits. If you don’t have enough assets to self-insure against major risks, make a resolution to get your insurance needs covered. Insurance helps protect against unforeseen events that don’t happen often but are expensive to manage yourself when they do. The following guidelines can help you prepare for life’s unexpected moments.

• Protect against large medical expenses: Select a health insurance policy or medical that matches your needs and your pocket. Consider ancillary products (such as gap cover) to supplement your medical aid.
• Purchase life insurance: First, take advantage of a group term insurance policy, if offered by your employer. Supplement it with your own cover, especially if you have children & large liabilities that will continue after your death. (e.g. home, personal & business loans).
• Get disability insurance The odds of becoming disabled at a young age are greater than the odds of dying young. Make sure that you also have adequate cover to replace your income in the event of disability.

New Year’s Resolution 4: Protect your estate

An estate plan and will may seem like something only for the wealthy. But there are simple steps everyone should take. Without beneficiary designations in a will, the fate of your assets or minor children may be decided by external agencies. Taxes and attorneys’ fees can also eat away at these assets. It can further delay the distribution of assets just when your heirs need them most. Here’s how to protect your estate—and your loved ones.

• Review your beneficiaries: The beneficiary designation is to make your wishes for assets known. It ensures that they are transferred to who you want quickly.
• Update or prepare your will: A will isn’t just about transferring assets. It can provide for your dependents’ support and care. It also helps you avoid the costs and delays associated with dying without one. It can also spell out plans to repay debts, such as a credit card or mortgage.
• Powers of attorney for health care: Appoint trusted & competent confidants to make decisions on your behalf if you become incapacitated.

Most importantly, remember that you don’t have to do everything at once!

There’s a lot you can do to improve your financial health by taking one step at a time. Think of these resolutions as a checklist. Get in touch with us and we’ll make sure that you achieve some real progress on your journey this year.