New Years Eve toast
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In the new year, you’re likely pledging to start a fitness routine or join a volunteer organization. But what are you planning to do with your finances?

Using the new year as a chance to make financial resolutions can be challenging. But with a solid plan in place, sticking to them can be a lot easier, and you’ll be glad you did.

To ring in the new year, consider these seven resolutions and how experts say you can fulfill them.

1. Build a budget

If you’ve never been able to stick to a budget, the new year is a great opportunity to start. With a solid budget, understanding where your money is going each month will help you reach all of your other financial resolutions.

Andrew Westlin, CFP and financial planner at Betterment, says you should have an estimate for the smallest amount of money you’d be able to live off of each month, including bills for essentials like loan payments, food, clothing, transportation and more. Whatever you have leftover, consider saving.

Keep in mind that a budget isn’t a strict guideline of what you can and can’t spend; budgets are meant to be flexible. If you overspend in one area, balance it by cutting back in another.

Use this calculator to help you build a budget.

2. Eliminate credit card debt

The average credit card borrower held $5,472 in credit debt in the first quarter of 2018, according to a CreditCards.com study of TransUnion data.

Making matters worse, carrying debt is becoming more expensive thanks to rate hikes From the Federal Reserve. As the Fed continues to increase interest rates, carrying a credit card balance will get even more costly. In 2019, plan on knocking out as much debt as possible.

Sean Fox, co-president of Freedom Debt Relief, says consumers who can pay down debt on their own should use payoff methods like the avalanche or snowball method. Those who are struggling with payments can consider credit counseling, a low-interest balance transfer, personal loan or even a debt settlement.

Use Bankrate’s personal loan calculator to determine your monthly payments.

3. Start an emergency fund

A Bankrate survey this year found that only 39 percent of Americans would pay for an unexpected $1,000 expense with their savings. Even worse, the Federal Reserve found that 40 percent of Americans can’t even cover a $400 emergency expense.

Without emergency savings, many Americans end up in debt trying to cover unexpected costs.

Consider setting up automatic transfers from your paychecks to a savings account; that way, the money is “out of sight, out of mind” and you won’t be tempted to spend it rather than save.

Most experts recommend having at least six months’ worth of expenses saved, but those starting from scratch can start small. A study by the Urban Institute found that having as little as $250-$749 saved can keep a family from falling on hard financial times, like missing a bill payment or getting evicted.

4. Get on track with retirement savings

Saving for retirement is one of the most important aspects of your financial journey. Considering current retirement-age Americans are facing realities that they may never retire, it’s critical that Americans start saving for retirement as soon as possible.

Judith Ward, CFP and senior financial planner at T. Rowe Price, offers a few ways Americans can responsibly save for their futures:

Start with your 401(k) plan at work. These employee-sponsored plans take a percentage of your pretax income and put it directly into an investment account. Most companies will match a percentage of your contribution.

“Taking advantage of a company match is a good starting point,” Ward says. “Or, consider starting to save 6 percent of your salary if your company does not offer a match.”

Ward also recommends using plan features that automatically increase contribution rates over time.

Open or fund an individual retirement account (IRA). Those who don’t have access to an employee-sponsored plan can use IRAs, which have similar tax benefits to 401(k)s. However, there are limitations to these accounts.

“Ideally, you’ll want to take advantage of the tax deductibility of your contribution,” Ward says. “But your deduction may be limited if you or your spouse are covered by a retirement plan at work and your income exceeds certain levels.”

The IRS raised the contribution limits for IRAs and 401(k)s for the 2019 tax year, and also raised the income phaseout ranges for IRAs.

Consider a Roth IRA or Roth 401(k): Roth options don’t provide an immediate tax benefit, but they do provide potentially tax-free income in retirement.

“With the unpredictability of future tax rates, it may be beneficial to have a mix of accounts with different tax treatments,” Ward says.

Self-employed? Consider saving in a Simplified Employee Pension IRA (SEP IRA): These IRAs are easy to maintain and have generous contribution limits that may be tax-deductible. However, Ward says consumers should remember that a Roth option is not available with a SEP IRA.

5. Know (and build) your credit score

Do you know your credit score? The average FICO score hit an all-time high of 704 in April.

Your credit score is an important financial factor that shows creditors how healthy your finances are. Good credit scores range from 700-749, and scores of 750 and higher are considered excellent.

Building a healthy credit score can take time, but there are some simple steps you can take to start on the path to good credit — things such as paying your bills on time and keeping your utilization low.

Here’s how you can get a free credit score.

6. Pay down student loans

If you’re tired of being weighed down by a hefty student loan balance, take 2019 as an opportunity to make a big dent in them — or pay them off completely.

Mike Crawford, product manager for student loan round-up app Momentum at Fifth Third Bank, says to start by reviewing your loan interest rates. Loans with the highest interest rates should be prioritized by paying extra on the accounts — that way, you’ll save money on interest. Making more than the minimum payment amount is also crucial to saving on interest.

If your interest rates are high, consider consolidating your loans to get a lower interest rate and manageable monthly payments.

7. Update your will

Thinking of your own will can be morbid, but it’s an important tool that will protect your final wishes. The new year is a great opportunity to sit down with a professional and plan out exactly how you want your assets allocated — and then you can enjoy the rest of the year without worrying about it.

“Even if you don’t have a lot of assets, a will, advanced health care directive and power of attorney are essential,” says Laura Davis, CFP in Atlanta. “It doesn’t have to be complicated or terribly costly, and the peace of mind it provides for you and your loved ones is invaluable.”

If you’re unsure of where to start, follow our guide on how to write a will.