As we’ve all seen firsthand, life can change a lot from month to month and year to year. But there are some simple financial habits that are always a good idea. With a little help from Haven Life, here are six things on our to-do lists for starting the year off right, no matter what your family structure…
1. Get familiar with your credit score.
The credit score — so much riding on one little number. Monitoring your score can be scary, but it’s also important for your financial health. The more you know, the more empowered you are. If you don’t already know your credit score, there are a number of apps and services that will track it for free each month and automatically notify you of any changes. The golden rule to improve or maintain good credit? Aim to pay your bills on time each month, and whenever possible, pay off credit cards in full.
2. Do a deep dive.
Take a look through your bank and credit card statements to check for any surprising activity. Many times, we’ve unearthed fraudulent charges or an ancient magazine subscription going to an old address. It’s also a good opportunity to take stock of what you spend your money on and notice any patterns. You may even discover areas where it pays to negotiate (for example, you can ask to waive the annual fee on your credit card, or ask for an interest rate reduction).
3. Consider life insurance.
Life insurance is one of the best things you can do for your loved ones. It can feel daunting, but if you have children, life insurance is one way to provide some financial security for them in the event something happens to you. Life insurance is also worth considering if you have people who depend on you in any way (for example, if you have a partner who relies on you financially, or if you’re single and have a mortgage and would want someone in your family to have your home as an asset if you were to die). It can also be worth considering if you don’t have children but plan to have them in the future, since the younger and healthier you are, the cheaper it is.
If you’re not sure if life insurance is right for you, try using this online calculator. (It will even tell you if you don’t need it at all!)
When it comes to life insurance, our online agency of choice is Haven Life. They make the process streamlined — the online application process is so simple! But the first step is to get a quote. You may be surprised by how affordable term life insurance can be. (For example, a 20-year, $500,000 Haven Term policy for a healthy, non-smoking 35-year-old woman is $20.32 per month.)
Consider cutting off any subscriptions or programs you no longer use (or never really used to begin with), like music streaming services, online publications, or fitness apps. Do you still need every streaming service now that your favorite show is over? Rest assured you can always re-up in the future if you change your mind.
5. Create an emergency fund. (Or, build up your existing one.)
Financial experts agree that one of the top things you can do for yourself, and your future, is to create an emergency fund. An emergency fund is a cushion, separate from your personal savings, that you put aside in the event of any unforeseen circumstances. Should something happen (say, a job loss, medical bills, property damage, the list goes on), your emergency fund can help prevent you from accruing debt and help you save in the long run. Just how much should go in your emergency fund? It could be anywhere from a month to six months of expenses, or more. It ultimately depends on what you can manage and what gives you peace of mind. You can always start small, and add to it whenever possible.
6. Set tangible goals.
With any kind of planning, it’s important to remember the why. Goalposts give you something to look forward to and provide motivation for staying on track. It could be a future goal, like paying off debt or putting money aside in a college savings fund. It can also be more immediate, like buying something for your home or taking a trip (when it’s safe to do so). Write them down so they’re official, then check in with yourself throughout the year to track and refine them.
If there’s just one thing you do this year, for both your peace of mind and your family’s future, life insurance is a great place to start.
Last but never least, know that any and all steps you take to improve your financial future are worth feeling proud of.
What goals are on your to-do list this year? Do you have any other helpful tips to add?
(Photos by Nicki Sebastian for Cup of Jo. This post is sponsored by Haven Life, a partner we love. Thank you for supporting the brands that help keep Cup of Jo running.)
Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. Policy and rider form numbers and features may vary by state and may not be available in all states. In NY, Haven Term is DTC-NY. In CA, Haven Term is DTC-CA. Our Agency license number in California is OK71922 and in Arkansas, 100139527.