New Year’s Resolutions for Financial Wellness

by Lori J. Baker | Jan 05, 2017   ()

As the new year opens – and the April 18 tax filing deadline looms –  you have a great opportunity to reflect on your current financial situation and plan for your financial success.

A bit of planning and a little time can result in definite savings throughout the year and into the future. Even making a small effort early on can make a big difference in the long term. These New Year’s resolutions for financial wellness can help you start 2017 on the path to achievement.

  • Resolve to make a net worth statement. Don’t worry, while a net worth statement is a big picture tool, it’s not as complicated as is sounds. A basic personal balance sheet answers two questions: “What do I own?” and “What do I owe?” The document itself can be as simple as two-columns on a sheet of lined paper. Arrange all your assets – things you own, such as your home, 401(k) and savings account – on one side. On the other, list all your debts, including your mortgage, student loan, car payment and any credit card balances. Your net worth statement will give you a wide overview of your finances. You will easily see which lines make the biggest contributions to your overall net worth, both positively and negatively.  Best of all, next year you will have a benchmark comparison to see just how much your net worth increased. 
  • Resolve to make goals. After making a net worth statement, some obvious goals may present themselves. Paying off credit card debt, making an extra mortgage payment or increasing your retirement contributions can significantly improve your long-term financial situation. If you’re in your 20s or 30s, work towards building up your 401(k). While a 10-15 percent election might sound huge, if you start early you will be amazed at how much your investment will compound. Reducing your balance on a credit card – or eliminating credit card debt entirely – also saves a boatload of money, because you’re not being hit with interest charges. 
  • Resolve to make a budget. Look at your net paycheck, which is what you take home after taxes and insurance. Where is it going? A monthly budget is one of the most important tools in financial wellness. Keeping a monthly budget will help you know if you’re on track to reach those goals you set after making your net worth statement and it will help you avoid struggling with unexpected expenses. 

Include your day-to-day expenses, but don’t forget to think ahead. Do you have big-ticket purchases coming up? For example, planning in advance for a new set of tires may help you avoid an unexpected expense while at the same time a vacation line item may be a wonderful reason to stay on track.

By putting your budget down on paper, you may also start to see some opportunities for smaller savings that can add up over time. Does your car insurance line item make you cringe? Maybe you can get a lower rate by calling another company – then celebrate with the savings!  Is your monthly fast food budget comparable to a car payment? Would it hurt to divert half to your 401(k)? You will find opportunities to get creative and your savings will start to snowball. 

  • Resolve to make an appointment with a CPA. A certified public accountant can help you think holistically about your financial situation. Whether you’re a student working to pay off student loans, a parent planning for your child’s college education or looking forward to retirement, a CPA can provide guidance on how to reach your financial goals.

While filing a tax return is more about looking backwards than it is planning for the future, reaching out to a CPA to help file can be a good way to begin a relationship and will give the CPA a head start on getting to know your finances. By going over all your tax documents, a CPA will have a good base to ask questions, make recommendations, and help you plan for the future.

About the author: Lori J. Baker, CPA is a member of MICPA and the tax partner at Baker Holtz and devotes the majority of her time to tax planning and consulting.  Baker’s experience working in all areas of the practice gives her a particularly well-rounded perspective and ability to advise clients. She can be reached at

Source: MICPA
Source: MICPA

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