If you've considered a resolution to get your finances in order this year, but found the idea so daunting that you opted to walk your dog an extra five minutes a day, we're here to help. What may seem like an insurmountable task becomes doable when you tackle small tasks one by one, month by month. Let our money experts guide you through the year to happier, healthier financial well-being. You could say it will be a walk in the park.
January: Dealing with high-interest debt
Paying interest is like shelling out money for nothing, so your first job is to keep track of your loan payments. For each of your debts, write down the interest rate, the minimum monthly payment and how much you owe, advises Shannon McLay, founder and CEO of Financial Gym in New York City.
Then implement the avalanche method: pay the minimum on all your debts each month and put the extra money toward the loan with the highest interest rate. If you get an unexpected gain — like a bonus or a tax refund — put it toward your principal debt, too. Once you pay it off, move on to the loan with the next highest interest rate, and so on.
February: Preparing for a calmer tax season
Avoid last-minute lost documents when filing your taxes. This month, as tax documents arrive, Lisa Greene-LewisCPA and a tax expert for TurboTaxsuggest storing them in a folder along with your receipts for deductible expenses.
Then think about the previous year. Write down all the big life moments that could affect your taxes, like buying a house or losing your job.
Finally, as basic as it may seem, triple-check all personal information you enter on your tax forms or provide to your accountant. One of the most common filing errors is entering incorrect Social Security numbers for spouses or children – and these numbers are essential to receiving valuable tax benefits and a timely refund.
March: Create emergency savings
You don't want to go to bed worried that a burst water heater could be your undoing, but many of us aren't prepared to cover an unexpected $$1,000 expense. This is why creating an emergency fund is so important. “The purpose of money is to feel secure,” says Suze Orman, host of the Women and Money podcast. “The goal is to have eight months of living expenses in savings.”
While this may seem impossible, it's not if you pace yourself. Orman advises saving the money for 12 to 64 months. “Follow a plan that makes you save a little more than seems easy,” she says. Set up automatic deposits – straight from your paycheck – into an interest-bearing account and name it “Save Yourself.” Experts say personalizing an account with a name that highlights your purpose motivates you to keep saving.
If you dipped into your emergency savings last year but are in better financial shape this year, focus on replenishing those savings.
April: Organize financial documents
Sure, disorganization can cost you time, but it can also cost you money, just like having to replace an original document (say, your car title). Julie Morgensternauthor of Organization from the inside out (US$ 15; amazon.com), suggests that you gather important papers, sort them by type and date, and store them in a document box near where you pay your bills. “It's easier to find and archive information as you use it,” she notes.
Then think about the information you are constantly looking for, scan the relevant documents and save them to a digital file. Finally, marvel at yourself when you find your most recent W-2 with a few swipes of your phone instead of the usual break-in of your home.
May: Maximize your investments
With tax stress out of the way – and possibly even a little tax refund money – turn your attention to your retirement account with the goal of contributing 15% of your income. (Take advantage of employer matching if your company offers it.)
Make sure the investment mix still suits your long-term goals. “Your 401(k) plan probably has an online tool that can help you realign your balances in the way that's right for you, based on your age and when you plan to retire,” says Katie Taylor, vice president of planning and engagement at Fidelity. Investments.
June: earn more with your savings
You would never store money under your mattress, but storing money in an account that barely earns interest isn't much better. Let this be the month you calculate what your savings account yields every year. With that amount in mind, look for low-rate, high-interest accounts offered by online banks and keep your money with one that offers the highest rates.
July: Check your credit report
It's easier to secure a loan for a big-ticket item like a car or house when you have good credit. Go to annualcreditreport.com and request a free report from Equifax, Experian, or TransUnion. “Instead of getting them all at once, request a report from a different agency every four months to track things throughout the year,” says McLay.
Read your payment history carefully to ensure it is accurate and report any activity you don't recognize. If you notice recurring suspicious activity, you may want to consider freezing your credit. Keeping in mind that child identity theft can go unnoticed for years, consider freezing your children's credit to help prevent it.
August: Save on school costs
Your child doesn't need a bunch of new school supplies when you have a junk drawer full of pencils, pens, and notebooks. Be resourceful and reuse, says Kelsey Sheehye, personal finance expert at NerdWallet. She also suggests teaming up with other parents to buy supplies in bulk. If you're shopping online for back to school, try a browser extension like Mel that automatically applies the latest coupons or promo codes.
If your child is applying to college – take a deep breath! – gather the necessary paperwork to apply for a student loan. The Free Application for Federal Student Aid (FAFSA) becomes available October 1;
September: Prioritize advance planning documents
Not to be doom and gloom, but you need a will and other end-of-life documents. “People don't like to think about death,” says Orman, who developed the online Will & Trust Kit of four “must-have” documents (US$ 199; suzeorman.com) with her estate attorney. “Everyone assumes you only need a will, but that just tells you where your assets will go when you die,” she points out.
You also need a revocable trust with an incapacity clause (which names someone to look after certain assets in the event of your incapacity); an advance directive (which states what medical care you want in case of an emergency); a durable power of attorney for health care (which names a person you trust to make medical decisions for you); and a durable financial power of attorney (which appoints someone to make financial decisions for you). Once you have these documents, hold a family meeting to inform your loved ones of your plans.
October: cut of accounts and subscriptions
You have a Spotify account, so does your husband, and so does your son. Getting rid of redundancies and recurring payments is like finding free money! Print out a few months of bank statements and highlight your regular payments, or use an app like Marcus that breaks down spending for you.
Also, try to negotiate with your suppliers, says McLay. For cable, cell phone, and internet service, look at the introductory plans competitors offer and ask your provider to match the cheapest. Or download an app like Trim, which negotiates lower rates with providers on your behalf. (Trim is free to use, but you'll share the savings with them.)
November: Reduce healthcare costs
Create a binder for your medical forms or go virtual with an app like Apple Health, which has a Health Records feature. This can help you avoid expensive diagnostic tests because, according to the doctor who has become Financial advisor Carolyn McClanahanmany diagnoses can be made based on your medical history alone.
Save money at the pharmacy too. Ask how much a medication would cost if you paid without going through insurance, and you may be able to get a lower price, McClanahan says. Download GoodRx, a free app that compares drug costs and offers scannable coupons, and remember to use your flexible spending account funds, which usually expire on December 31. If you're not sure what's covered, visit fsastore.com for eligible products.
December: Have a conversation about money
What do death, politics and religion have in common? For many of us, it's easier to talk about them than about finances. Break the taboo by having a quick weekly check-in with your partner, says Cameron Huddleston, a personal finance journalist.
A discussion about what you value most can help you get on the same page and create shared financial goals, says Kathleen Burns Kingsbury, wealth psychology expert and host of the podcast Breaking the Money Silence.
Then look at your spending over the last two months and see if it aligns with your values. For example, if quality time with your family is important to you, but most of your extra money goes toward material items, you may want to reevaluate your budget.
