Make 2018 Your Best Financial Year Yet

Create a new budget to accommodate your goals in the New Year

The beginning of the year is always a time for resolutions and fresh starts. Some make plans to eat healthier and exercise more, while others look to fulfill goals like having children or planning for retirement.

However, one goal everyone can resolve to fulfill in 2018 is to review personal finances to make sure plans are achieving what they should.

Following are a few items to consider as you evaluate your finances.


Decide how much money you want to save in 2018. Whether it’s for your child's college tuition or increasing your retirement nest egg, set a realistic goal and decide how much money you should put into savings each paycheck.

Most banks have an automatic deposit option that occurs each pay period. If you’re not sure how much to allocate, start with $25 or $50 a paycheck and increase it over time when possible. 


When it comes to retirement savings, some reports show many Americans are not saving, or are under-saving, for their golden years. We recommend contributing enough to a 401k to at least meet an employer match if one is offered.

While the amount each individual can afford to contribute varies, everyone should try to invest something. The typical recommendation for retirement is to contribute 10 to 15 percent of your salary every year starting in your early 20s.

In 2018, the maximum employee contributions to 401ks increased to $18,500, a $500 increase from 2017. If you are age 50 and older, your catch-up contribution increases your limit by an extra $6,000. 


Establishing an emergency fund with enough money to cover three to six months of expenses is highly recommended. If you dipped into savings over the holidays, use the first few months of the year to build that savings back up.

A minimum of $1,000 in your savings account is recommended for any emergencies that may come up throughout the year. Another tip for short- or long-term savings is to try to increase the amount you save each year by 2 percent—while it may sound small, this can have a large impact in the long run. 


One of the best methods for paying down debt is the avalanche effect, which focuses on interest rates. You start by paying down the highest interest debt first, and once that is paid off, apply that payment to the next highest interest debt. You can continue this process until debt is eliminated.

Another method of tackling debt is the snowball effect, which focuses on debt balances. With this strategy, you pay the minimum due on all your bills, but allocate extra payments to the smallest debt balance. Once the smallest debt balance is paid off, you can move to the next smallest balance and so on, until the debt is paid down—in effect “snowballing” your payments to quickly squash debt balances. 


Create a new budget to accommodate your goals in 2018. There may have been some things you spent money on in 2017 that you didn't use or need that can be easily eliminated.

For example, one instant money saver could be dropping cable (if you don’t have a cancellation penalty) and subscribing to lower-cost streaming sites, like Hulu Plus or Netflix. Other entertainment and consumable expense items like daily coffee runs, dinner out and happy hours also might need to take a back seat as you get your budget in order. To help keep these items in check, set aside a certain amount of money for fun outings and treats, and stick to that budget.

Also, assess your monthly expenses, and determine if there are areas to cut, change or eliminate. Some of these items may include re-evaluating car and home insurance rates and phone contracts. Subscription services, gym memberships and donations can quickly add up as well, so make sure you’re intentional in these areas.

Finally, review your credit cards and see what interest rates are currently being charged. You can request to have them lowered, or you can consider consolidating to the card with the lowest interest rate.

When it comes to organizing your finances, the smallest steps can lead to big results. As you head into 2018, take some time to review your financial situation and determine the best options that work for you and your lifestyle.

Categories: Finance