The countdown to 2016 has just about begun. If you're like many people, you might be mulling over some New Year's resolutions, such as hitting the gym more, learning a new language or taking a cooking class.
All are worthy goals, but why not add some financial resolutions as well?
Pay yourself first. Even if you aren't living "paycheck to paycheck," you probably don't have much trouble spending your money - because there's always something that you or a family member needs, always a repair required for your home or your car, always one more bill to pay. But if you are going to achieve your long-term goals, such as a comfortable retirement, you need to invest consistently. So before you pay everyone else, pay yourself first by having some money automatically moved from your checking or savings account each month into an investment.
Take advantage of your opportunities. If you have a 401(k) or similar plan at work, take full advantage of it. Contribute as much as you can afford - or at least enough to earn your employer's match, if one is offered - and choose the mix of investments that give you the potential to achieve the growth you need at a level of risk with which you are comfortable.
Focus on the long term. In the short term, you might be excused for not wanting to invest. The headlines are typically scary, the financial markets are frequently volatile and the future often looks murky. Yet, if you can look past the uncertainties of today and keep your focus on tomorrow, you will find it easier to follow a disciplined investment strategy that gives you the opportunity to meet your long-term goals, such as a comfortable retirement.
Don't be driven by fear. When the market is down, investors tend to react with fear. Specifically, they rush to sell their investments, afraid that if they don't "cut their losses," they might sustain even bigger ones. If you can get past this feeling, you may find that a down market can offer you the chance to buy quality investments at good prices.
Forget about the "hot stocks." You'll hear friends, co-workers and talking heads on television tout today's "hot stocks." But by the time you might hear about them, they may have cooled off - and, in any case, they might not be appropriate for your needs. Forget about "getting rich quick in the market" - it probably won't happen. True investment success requires patience and persistence.
Cut down on your debts. It's easy to pile up debts, but a lot harder getting rid of them. Yet, if you can reduce your debt load even moderately, you'll free up money you could use to invest. So look for ways to conserve, cut back and consolidate - it will be worth the effort.
Making these resolutions - and sticking to them - can help you as you work toward achieving your financial goals.