The New Year Resolutions!

It is important and necessary for us to "shed our skin" as well. The enlightened version of who we can be awaits! Let's take a look at some possible New Years resolutions as we change and grow ourselves.

Increasing the savings rate is a good plaa e to start. Let's make 20% of our gross income the resolution. If we make $4,000 a month, we save $800 a paycheck. Where? It could go into a 401(k). Maybe into a Roth IRA. Maybe it goes into a brokerage to build up the emergency saving. Maybe it is extra payments on debt. How? Commit to cutting back on spending wherever possible. The less we spend, the more we can save!

How do we spend less? We become more mindful of each purchase we make. We ask ourselves, is this something I need or simply something I want? If it is a want, we then decide if we are going to prioritize savings overspending. We know that our savings, invested wisely, will get us closer to reaching our future goals of financial freedom so hell yes, we spend less and save more. We want FINANCIAL FREEDOM.

Here is another resolution. We will read at least two financial books this year. We know that the more we educate ourselves on the world of money, the more knowledgeable we will be in making better decisions that have big consequences in creating our future life. It is important to find the right teachers. Here (https://www.crazymanpinkwig.com/personal-finance/finance-books) is list of personal finance books. Here (https://www.crazymanpinkwig.com/investing-retirement/investment-books) is a list of books on investing. It is smart to become a reader. Here (https://www.lifehack.org/articles/lifestyle/10-benefits-reading-why-you-should-read-everyday.html) is why.

Why a book? Books provide something that a podcast, a video, a radio show, and a television broadcast cannot simulate. They provide you and me an opportunity to gather wisdom from others who we will probably never meet. They provide us a period of solitude where we can concentrate and reflect on what we are doing, what we are learning, and where we want to go with our life. Books change lives!

Let's make investing wisely one of our resolutions. This is relatively simple actually. We invest in multiple assets (stocks, bonds, and real estate for example), while keeping our costs as low as possible (index funds). When we are under 50 (maybe 60?), we go heavy on stocks. As we age, we own more high quality bonds. This means reviewing our investments now to see what we own and what they cost. Learn more here (https://onebiteblog.com/reviewing-your-investment-portfolio/) .

So, just how important is it to review the investments? By making changes to your allocations today (taking more short-term risk in stock index funds for example) and cutting your fees to the bare bones (identify index funds with expense ratios below .2%) will dramatically increase your returns over time. How much? You could very easily see hundreds of thousands of dollars more in your portfolio!

Here is another resolution. Let's wait 30 days before buying anything that isn't absolutely necessary. If there is something you want to buy, give it 30 days before pulling the trigger. If after 30 days you still want it and have the money; go for it. If after 30 days you have forgotten what you wanted (this happens a lot), you just saved yourself a chunk of money and the sales tax that went with it. Let's cut back on impulse buying!

Let's cut our debt dramatically this year! First, we identify how much debt we have in our life at the beginning of the year and then we figure out a plan on reducing it as best we can by the end of the year. You can learn more about debt reduction and what to avoid here (https://www.crazymanpinkwig.com/personal-finance/debt-management) . Here is a really good reason to take on this resolution. The less debt you have, the more freedom in your life. Financial Freedom awaits!


Let's cut our debt dramatically this year! First, we identify how much debt we have in our life at the beginning of the year and then we figure out a plan on reducing it as best we can by the end of the year. You can learn more about debt reduction and what to avoid here (https://www.crazymanpinkwig.com/personal-finance/debt-management) . Here is a really good reason to take on this resolution. The less debt you have, the more freedom in your life. We want more freedom!

Let's cut our tax bill this year. We can spend less money and save on sales tax. We can contribute more to a Traditional retirement plan at work like a 401(k), 403(b), TSP, or 457. We can invest wisely in a brokerage so most of our gains are long term, rather than short term. Long term gains are much lower and for some, they are tax free! See a current federal bracket here (https://mcusercontent.com/514966c62246ade13d1a0336b/files/afdc7b26-eff7-5636-0a8f-420f1f695631/2022_Real_Federal_Tax_Tables.xls) that accounts for the new 2022 standard deduction.

Let's make moves this year to cut our taxes in the future. An easy way to do that is investing in a Roth IRA outside of work or if possible, a Roth 401(k) at work. Maybe we do both! All money that goes into those Roth accounts will be tax free when pulled out later in life (be sure to meet the 5-year qualifying period (https://www.investopedia.com/ask/answers/05/waitingperiodroth.asp) to make this so). What we do today could dramatically reduce our taxes in the future. Let's make it happen!

Our last resolution might just be the biggest game changer. Let's find more ways to give. By giving more, we will spend less time trying to buy happiness, which of course, does not work. Giving more will help us appreciate what we have rather than being unhappy with what we don't have. Unconditional giving of our time, energy, stuff and yes, our money, can dramatically improve our life. Embrace the power of giving!

Stuff the lawyer wants me to say: Investing outside a bank or a credit union is not FDIC insured. You may lose the value in the investments you select. All information provided here is for informational purposes only. It is not an offer to buy or sell any of the securities, insurance products, or other products named. Translated: I am not selling anything! Educate yourself, research the information that you learned and finally make the right decisions that will benefit you and your family going forward.

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