3 Financial Moves Everyone Needs to Make as a New Year Begins

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With a new year getting underway, there are three moves you need to make to set yourself up for a secure future. Keep reading to learn more. 

There are certain personal finance tasks you need to complete every year. Taking care of these obligations will help ensure you’re making the most of your money and not taking on more risks than you should with your hard-earned dollars.

Since a new year is getting underway, it’s a great time to check these tasks off your list so you can feel confident you’re on the right track toward a more secure future.

1. Rebalance your portfolio

You should have money invested in a brokerage account. And you should have some of this money in the stock market because investing in stocks can produce a better return than buying many other assets. But you don’t want too much money in stocks because you can also lose that money as the market goes down.

The amount of money you should have in stocks changes over time. When you are younger, you have more time to wait out recoveries and to get back your money after a market crash. When you are older, you don’t have the luxury of time and can’t afford to face big losses when you’re nearing retirement. You might not have time to wait for a market rebound if you need to start taking out your money.

One good rule of thumb to figure out how much to invest in stocks is to subtract your age from 110. Then, invest that percentage of your portfolio in stocks. So if you are 20, you’d have 90% of your portfolio in the market but if you are 70, you’d have 40%.

Since you’re getting older as the new year begins, take a look at whether you have the right percentage of your money in the market and make any necessary changes.

2. Confirm that you’re using the right financial accounts

It’s also a good time to take a quick look at your financial accounts. Specifically, you’ll want to check out:

Are you paying any unnecessary fees to your bank?Is your credit card charging an annual fee but not providing enough benefits to justify it?Is your credit card rewards program a good fit?Do you have any loans you could refinance at a lower rate?

By asking yourself these questions, you can decide if it’s time to make a change. If you paid $100 in ATM fees last year, for example, you may want to switch to a bank with a wider ATM network or one that reimburses you for the fees you paid.

Make a list of your accounts and the features of each one, consider what you like — and don’t — about them, and research what else is out there to see if there’s a better fit.

3. Do an insurance check-up

Finally, it’s time to check your insurance policies to make sure:

You have the right amount of coverage. Do you need to increase your policy limits if, for example, the cost of rebuilding your home has gone up.You have the right types of coverage. Do you have adequate protection for all your assets (including your car, your home, and anything else you can insure)?You’re paying the right price for your coverage. Is there an insurer out there that might offer a cheaper price for the same or better coverage?

Get a couple insurance quotes from different providers, making sure you have all the coverage you need, so you can make an informed choice about whether to stick with your current insurer or switch companies.

By completing these three moves as a new year begins, you can make sure you aren’t leaving money on the table or at risk of losing it if you have taken on too much risk in the market or don’t have the right insurance protections. It won’t take long to do these tasks and they can make a big difference in your future.

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