Just because the first day of the New Year has come and gone, doesn't mean it's too late to start your new financial lifestyle. Here is the second half of our New Year's Financial Resolutions. We hope you take the time to review your financial situation and see what you can and should improve, such as, reviewing your insurance policies for the best coverage or building an emergency fund.


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Hi, I’m Carly Cherry with Cambridge Credit Counseling and welcome to Personal Finance 120 – information for managing your financial life in about 2 minutes. We’re back this week for the second half of our series on New Year’s Financial Resolutions. Here are five more resolutions you can make this year to get financially fit.

(On-Screen Graphic: Start saving early for the holidays.) If one of the reasons you need to take a second look at your financial lifestyle is because you spent too much during the holidays, then you might want to consider start preparing for next season right away. Whether you choose to open a separate savings account, purchase gift cards throughout the year to prevent overspending, or buy items throughout the year when you see them on sale, anything is better than spending more money than you can afford at the last minute.

(On-Screen Graphic: Review your insurance policies.) Any insurance is better than no insurance, but it’s always better to have the kind of coverage that’s exactly right for your family. If you need to cut something extra out of your monthly budget to be able to afford insurance that covers all of your needs – the loss of property, health, or your ability to work, you owe it to yourself and your family to think about it. A conversation with an insurance professional or two wouldn’t hurt, either. A small sacrifice today will be worth it if the unexpected happens.

(On-Screen Graphic: Build an emergency fund) No matter where you are in life, you should have an emergency fund that’s separate from your other savings. Most experts recommend building an emergency fund that’s equal to at least 4-5 months’ worth of your essential monthly expenses, which means you first need to calculate what that amount is, of course. Building an emergency fund while you’re saving to buy a home or setting aside money for a child’s tuition can be difficult if you don’t plan carefully, and even with a blueprint in place, you have to follow it faithfully.

(On-Screen Graphic: Pay off debts.) If the holiday season left you regretting the amount you spent, then this is the time to commit to paying off your credit card balances before the interest gets out of control. That means always making more than the minimum payment every month. You’ll pay off the debt faster this way and pay less in interest. If you’re unable to make more than minimum payments, consider contacting a (On-Screen Image: www.cambridge-credit.org) credit counseling agency to learn about your options.

(On-Screen Graphic: Open up a 401k.) Whether or not your retirement is imminent, you need to have a plan. It will happen at some point. Should you contribute to your company’s 401(k)? Does your company match your 401(k) contributions? Should you go with a traditional 401(k)? Would a Roth 401(k) work better for you? Which tax schedules and contribution limits make the most sense for you? These are just some of the questions you need to ask a professional. We suggest starting your research about 401(k)s on the (On-Screen Graphic: www.irs.gov) Internal Revenue Service’s Website, at www.irs.gov.

That completes our list of ten New Year’s Financial Resolutions. Whatever financial goals you set, we certainly hope you meet them. Until next time, I’m Carly Cherry with Cambridge Credit Counseling.