New Year's Resolutions for Your Financial Future

From paying bills to sorting out your portfolio, advisors offer some tips for cleaning up your finances in the new year.

New Year's resolutions can save you a few pounds and a little money, but maintaining your financial resolve year-round is a substantial investment in yourself.

Taking another look at your finances, from your paycheck to your portfolio, at the beginning of the year can pay huge long-term dividends, according to financial advisors.

"If setting goals is the first step, then taking action is the next," says Luke Vandermillen, vice president at Principal Financial Group, "We know that a lot of well-intentioned New Year's resolutions can quickly fall off the wagon."

The key to success is making simple financial changes that you may only need to think about once. John S. Kiernan, the senior writer, and editor at credit and finance site WalletHub, says signing up for credit alerts through credit agencies Equifax (EFX) - Get Equifax Inc. Report , TransUnion (TRU) - Get TransUnion Report and Experian can help avoid errors that damage your credit score. That damage can increase your credit card rate and make it more difficult to secure a loan or mortgage.

Kiernan also suggests setting up automatic payments that pay bills immediately after you receive your paycheck and just before your monthly due date. That will both improve your credit score by reducing your ratio of debt to available credit and help pay down high-interest credit-card bills. Transferring outstanding credit card balances from high-interest cards to cards with 0% monthly interest can also help pay down that balance and add as much as a month's worth of salary to an emergency fund. Though the Financial Industry Regulatory Agency (FINRA) says everyone should have 12 to 18 months' worth of income saved, it notes that 54% of Americans don't have such a fund in place.

"You don't need to put the rest of your financial life on hold until your emergency fund is complete. Rather, chip away at it over time," Kiernan says.

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Advisors note that this is a good time of year to give neglected retirement plans like your 401(k) or IRA another look as well. Catherine Golladay, Charles Schwab's senior vice president for 401(k) participant services and administration, suggests the following course of action

  • Rebalance: Your retirement plan may have been knocked off balance by recent stock-market fluctuations and may need to be rebalanced to ensure that one investment isn't an outsized portion of your portfolio.
  • Check beneficiaries: If you got married, divorced or had a baby this year, this is a good time to make sure that your savings go to the right person in the event of your death. If your married, the law makes your spouse the default beneficiary. If you have other ideas about where your money should go, speak up now.
  • Find old 401(k)s: In a gig economy, you're going to change jobs a few times. That may mean you have money sitting around in a 401(k) from another employer. That gives you the chance to compare 401(k) plans, roll it into an IRA, move the old money into your new plan, or leave it alone. If you take the latter option, make sure you tweak settings to reflect your current situation and risk tolerance.

"Your 401(k) is a long-term investment that you'll contribute to and maintain throughout your career," Golladay says. "While January is a great time to revisit your allocations and other settings, don't forget to make periodic adjustments as you go."

Most importantly, advisors suggest using this time of year to consider the bigger financial picture. Anthony D. Criscuolo, a certified financial planner with Palisades Hudson Financial Group in Ft. Lauderdale, Fla., points out that your annual finances include more than just your short-term payments and long-term portfolio. They encompass just about all aspects of your life and warrant serious consideration as you face the year ahead.

"Look at all the issues confronting you," Criscuolo says. "Consider all tax, accounting, estate planning, insurance, business management, retirement, and charitable-giving considerations."

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.