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The numbers "2019" are written in the air with a sparkler near a tourist camp outside Krasnoyarsk, Russia. Ilya Naymushin/Reuters

6 New Year’s resolutions for your finances

Spending less and saving more top many of our New Year’s resolutions lists. The broad goals are good to have, but there are a number of other, more specific financial changes to aim for next year.

As you think about 2019, here are some recommendations from financial experts that can, as one of them writes, help you “explore your big-picture dreams and craft a plan to make these aspirations a reality.”

1. Discuss financial planning with your kids

Terri Kallsen, certified financial planner and executive vice president of Investor Services at Charles Schwab: This is something I started when they were very young, but now that they’re in high school and about to graduate from college, their relationship with money and investing is changing. We try to keep it simple and actionable, drawing many of our conversations back to the three S’s – How much do you want to spend, save and share? It’s a great time of year to do this, as all three topics are so important, but sharing never seems to be so top-of-mind as around the holidays.

2. Revisit your family’s financial plan with a financial consultant

Terri Kallsen: A financial plan is such a central piece to both establishing and staying on track with all sorts of goals. However, without revisiting it on a regular basis and actually taking the steps to progress in the plan, those goals are at risk. Planning is a hugely important first step, but how you monitor, update and execute on that plan is equally important.

3. Make sure you have enough emergency funds

Tony Drake, certified financial planner, Drake and Associates: If you do not have a dedicated emergency fund, the new year is a good time to get started. In a traditional situation, I recommend everyone has a rainy day fund with enough cash to replace three to six months worth of income. However, there are situations where it’s a good idea to bump that up. If you have two partners who are self employed or who work at the same company, they should double their rainy day fund and have six to 12 months of income in case of an emergency.

4. Re-evaluate your taxes

Tony Drake: Everyone should take a good look at how the tax reform passed earlier this year will affect their taxes for the next 20, 30 or even 40 years. We have some of the lowest tax brackets in history right now, and people should take advantage. I recommend considering a Roth conversion. The Roth is a real hidden gem a lot of people are missing. We’ve seen clients save hundreds of thousands, if not millions, of dollars over decades because taking the tax benefit later far outweighs the benefit of taking the deduction now, unless the employee is a very high earner.”

5. Try your hand at microinvesting

Tony Drake: Microinvesting through apps is really the icing on the cake for young investors. Microinvesting is, as the name implies, the act of investing relatively small amounts of money, and it often does not come with account minimums like other, more traditional types of investments.

Any time you can get more money into your investment accounts, it is a good thing. The earlier you can start saving for retirement, the better. These tech tools are a simple way to get money into your accounts, and it can add up to a bigger amount than many people realize. That being said, microinvesting will likely not get you to retirement on its own. You need to have a plan that includes systematic investing coming out pre-tax from your payroll. Don’t miss out on the free money your employer is offering with a 401(k) match.

6. Set goals for three “dream” life experiences, plus a budget and timeline for doing them

Linda Davis Taylor, CEO and chairwoman, Clifford Swan Investment: For a lot of people, a budget can feel limiting. And while financial plans certainly set guardrails, your budget — at its core — is a reflection of your values. It’s a place where you can (and should!) speak up about the things that are important to you. The new year is the perfect time to explore your big-picture dreams and craft a plan to make these aspirations a reality.

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