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The beginning of the year is always a great time to improve your finances. We’re already on high from closing out the last year, and we feel optimistic and excited for the future.

So why not hit the ground running by getting your money in order with these 9 things you should do at the beginning of the year? Besides these are way easier than starting to work out more.

1. Open A Retirement Account

If you don’t already have a retirement account – whether a 401k through your employer, or an Individual Retirement Account (IRA) then now is the time to do it.

It can be as easy as a phone call to your HR department to get you started, or in just a few minutes to set up an Individual Retirement Account (IRA). All you need is your name, social security number, and your birthday and you can have an IRA done and crossed off your new year’s resolution list. My favorite super quick, cheap roboadvisor to use it Betterment.

Take it up a notch

If you already have a retirement account, then you can take your financial wins for January up a notch by increasing your contribution by an additional 1% every six months and if you’re feeling really bold, open a Roth IRA (if your income allows it). This is an after-tax retirement account that allows your contribution earnings to grow tax-free. It’s no secret I love Roth IRAs for the tax-free growth benefit, as well as the ability to withdraw the contributions tax-free without penalty if an emergency happens and you need the cash.

 

2. Assess The Damage

If you haven’t sat down and tracked all the money you spent over the holiday then now is a great time to do it. Even if you drove to your Christmas destination, travel, gifts, and food all add up.

If you blew up your budget for the holidays then don’t despair. You don’t need to beat yourself up about it, and you can get back on track pretty easily by using number 9 on this list.

3. Gather Your Tax Documents

I know there are a few months before we get into tax season, but starting to gather up all receipts and making notes of deductible expenses is a great activity to complete in January.

Not only are the expenses still fresh in your mind, but it also allows you to remove some of the clutter from your purse, wallet or car glove compartment. All those crumpled up receipts that have been tucked away for months can get lost in the whirlwind that is April tax preparing and you don’t want to miss a deduction because you couldn’t find the receipt when you needed it #AskMeHowIKnow.

Not to mention that tax preparers usually charge extra for clients who bring them a shoebox full of receipts for them to organize and make sense of.

If you need a list of what documents to start gathering you can find it in this article What To Gather When Preparing For Tax Season

Side Note: With the next tax laws having their debut, many people will find that it is more advantageous to file with the standard deduction rather than itemized deductions that homeowners (especially) used to use in the past to save more on taxes. However, it’s still a good idea to gather all your documents just incase you could save more money itemizing your returns.

4. Put Your Savings on Autopilot

You achieve what you focus on. So if you want to actually save money, then it has to be a priority.

Putting your savings as an afterthought (saving whatever is left over after spending) is almost guaranteeing you’ll never save anything.

Instead, you should put your savings on autopilot either by setting up direct deposit with your company to savings account so you never see it, or completing an automatic transfer from your checking account to your savings account monthly/biweekly.

Take it Up A Notch

Using saving tools like qapital, you can save in even more and in interesting ways. You can round up to the nearest dollar and save a little extra without even thinking about it, or you can have more fun and save specific amounts only when your favorite celebrity makes a tweet.

Other interesting ways to save might be trying a savings challenge. If you are looking for inspiration check out this article on the top savings challenges that you can try to save $1000 or more quickly.

The most important thing is to find a way that is fun, easy, and automatic to save.

 

5. Evaluate Your Insurance

Now is a good time to take a look at your car, home or renter’s insurance premiums to see if you are getting the best deal possible.

I know it’s easy to pick an insurer and stick with them until the zombie apocalypse but you could be saving hundreds of dollars by switching insurance providers. That’s no small chunk of change.

Of course, it’s never just about the price, so only you can determine if a switch is worth it to you, but it never hurts to find out.

Take it up a notch

A good money move in the insurance realm is to ensure that you are properly and adequately covered.

If you’ve renovated your house recently – fixer upper style – and haven’t made changes to your home insurance then you could be underinsured. Definitely don’t want that surprise if something bad happens. Likewise, if you have comprehensive coverage on a car worth under $1000 then you could be over-insured.

6. Put An Eye on Your Credit

Your credit score is a snapshot of how you are managing your credit at the time the score is pulled. But the score impacts much more than your ability to get access to credit. Landlords, insurance companies and even employers take a look at your credit report or credit score so it’s important for you to get a copy of your credit report from each of the 3 bureaus as well as checking your credit score.

Now, you can get a free copy of your credit report but you’ll have to pay for your real score. Other companies like credit sesame and credit karma allow you to see a credit score (but it’s not the score most companies use (the Fair Isaac Company (FICO) score), so it should be for informational purposes only). You can get a copy of your score from myFICO.

And don’t worry. If your credit is a lot less than you expected there is something you can do. Here are the 8 most common reasons for a low credit score and what you can do about it.

7. Create An Annual Budget

Businesses, corporations, and even companies do it, so we should definitely be doing it too … even if you have a monthly budget.

An annual budget highlights expenses that will occur throughout the year that might not occur regularly and hence aren’t usually covered in the monthly budget. Expenses like car maintenance, new glasses, insurance if paid monthly, or quarterly sewer bills.

Take it Up A Notch

Having an annual bill can also help reign in some expenses that can bloat very quickly. Case in point, grocery bills. It’s much easier (and doesn’t seem as bad) to spend 1500 a month on groceries/dining out, than if you saw you were spending 18,000 a year on groceries

Use your annual budget as a way to curb flexible spending by making more deliberate plans to save and structure around discount opportunities.

8. Plan Your Vacations

Even if you are fresh off the heels of Christmas and New Year’s holiday you want to start thinking about which vacations you would like to have.

Spring break is a few short weeks from January and the best way to ensure you are able to responsibly pay for those trips is to know when they are happening and start saving.

The plans don’t have to be set in stone, they just need to be thought about so you can request vacations and start saving as needed.

9. Clean House

January is a great time to do a spring cleaning and downsize many of the items you accumulated throughout the year (and holiday).

Some of the key items that can go are things you haven’t worn in the last 90 days, Christmas gifts that weren’t your style or old items sitting in your basement for the last few years. Things that no longer fit – whether too tight or too big. Let’s face once you gain/lose the weight you likely won’t want to wear those same old clothes.

Clean out your closets and sell or donate any items that are no longer needed to get a little more cash flow.

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