6 Smart Financial Moves for the New Year

The new year is the perfect time to review your finances, make the most of new opportunities to save, and cut back on unnecessary expenses. The following steps can help you start the year on strong financial footing.

  1. Save more in your 457. You can contribute $500 more in your 457 plan in 2020 than last year — the new limit is $19,500 (or $26,000 if you’re age 50 or older). If you receive a raise or promotion, save some of the extra money before you can spend it.
  2. Pay down high-interest credit-card debt. The less money you spend on interest, the more you’ll have available for other financial goals. Use our debt calculator (www.icmarc.org/debtcalc) to see how much you can save in interest by boosting your debt payments.
  3. Build an emergency fund. This way you won’t run the risk of falling into high-interest debt if you have unexpected expenses. Work toward keeping three to six months’ worth of living expenses in a money-market or savings account.
  4. Review your credit record. Check for errors and ways you can improve your credit habits, such as making sure you pay your monthly bills on time. You can get a free copy of your credit report from each of the three major credit bureaus every 12 months at www.annualcreditreport.com.
  5. Re-shop your car insurance. Your auto insurance is probably one of your largest regular expenses. See if you can save money by increasing your deductible, qualifying for discounts, bundling homeowners (or renters) and car insurance with the same company, or shopping around for a better deal.
  6. Save money on everyday expenses. Cutting back on restaurants or entertainment by even a few dollars a week can make a big difference over the long term if you invest the extra money in your retirement-savings account. See Small Change, Big Savings (www.icmarc.org/smallchange) to calculate the impact.


    Return to top