Top 10 Financial New Year's Resolutions You Should Be Making

The first days of a new year always bring with them a need to clean the slate and pledge new resolutions with the best of intentions behind them, but while the focus of these are usually on health and wellness, many forget that a healthy financial life is just as important in many ways.

Not only can such a thing free you to pursue your many life goals and dreams, but free you emotionally from the added stress of crushing debt.

This is why these days you see just as many money motivated resolutions right alongside the recommendations that deal with diet and exercise.

Yet with so many out there to follow, it can be hard to determine what is the best and most universally applicable financial advice. So here are ten diamonds in the rough we think everyone should take notice of.

1. Resolve Your Debts -- This is the one resolution that must be tackled before everything else, but it's also the one that takes the most discipline. The quickest path to living debt-free is to cut your spending and put the extra money in your budget towards paying off your debt a little at a time. The key is sticking with it, but you don't have to do it alone. A credit counselor can go over your strategy and support your effort, while a debt reduction service can settle debts over $10,000 to a smaller, more manageable amount for a fee.


2. Review Fees, Interest Charges, and Automatic Payments -- You're probably losing money while you sleep, which is why it's important to go over all direct payments and make sure the services attached to these payments are something you still want to support. This is the perfect time to assess various subscriptions and try to cut back. You can also try to negotiate with your credit card company for a lower interest rate and your bank for lower account fees. Also, try to only take out cash from your bank's ATMs to avoid paying the ATM fees that often come from foreign machine withdrawals. Paying out $2.00 here and $1.50 there adds up.

3. Write a Will -- Put this one off for too long and your last wishes are in danger of not being honored, while your family has the potential to descend into infighting. A will is especially important if you die before your kids reach the age of majority, as not appointing a guardian may mean the courts will decide who takes care of them. A dangerous thought, but only one in five parents actually have a will. Anything can happen to us at anytime, so ensure you have the peace of mind to know that your kids and spouse will be taken care of. Also, don't forget to update it as life circumstances change.

4. Start Investing -- Even if you can only afford putting away $10 a month, you can still find cheap quality stocks or mutual funds one share at a time. They are a nice introduction to the investment game and a great way to begin to secure your future. You can also start contributing to an RRSP or other investment options such as gold or silver. As long as you keep at it for the long haul, you'll be able to see your investment pay dividends in the future.

5. Keep Better Tax Records -- This is a resolution I need to heed for myself. My receipts are always a tangle at the bottom of my wallet, but if you're able to file those ones that pertain to a known tax-deduction away in a file right away, preparing those taxes for the next year becomes a heck of a lot easier. Plus, you have less of a chance of missing anything, which may open yourself up to an audit and may mean you miss a deduction category that you are entitled to. As a more organized person, you are also better able to file early and miss the March or April rush.

6. Trim Bills -- Trimming bills means calling your cable, internet and wireless companies and updating your service packages to your current needs. You probably don't need so many TV channels and maybe you don't use that iPhone data package as much. Perhaps you don't call as many countries as you thought and don't need that all world long distance plan. These are all ways you can trim your bills and save some money that you can put towards reducing your debt. Try to make sacrifices, not just cutting back things that you no longer use, but things that aren't necessary to have.

7. Review Your Insurance Coverage -- Buy life insurance, typically three times your annual income's worth, so that your family is taken care of in the event of your death. Be sure to update the amount of coverage according to the expansion of your family or a change in your financial circumstances.

The earlier you buy, the better your chances that you'll qualify for a standard term policy. You will also be able to pay a lower premium starting out than you would receive for a guaranteed issue policy. It's also important to consider disability insurance in the event you suffer a severe setback and cannot work. You may also want to consider critical illness in case you get a life-threatening illness and long term care, so that you are taken care of near the end of your life.

8. Explore Additional Income Sources -- Saving money isn't just about putting money away in a savings account, it's also about trying to find additional income sources to increase what you're taking in. Some simple ways for doing this include selling some of your old stuff, renting an extra room or basement suite in your home, or taking a part-time job. It may suddenly pack your life with more stuff to do in the short term, but you'll be thankful for the extra money in the long term.

9. Pay Yourself First and Last -- One of the keys to clearing your debt and achieving your financial goals is keeping yourself motivated and one of the ways of doing that is by making a point to pay yourself first. Before you do anything else, like paying bills, set some money aside for yourself in savings, or to do fun things with. Then at the end of the month if there is still money left over after settling your expenses, you can pay yourself again with the rest.

10. Build a Three-Month Cushion -- Everyone needs an emergency fund. Otherwise known as a financial cushion, the fund should be enough money to last on your own for three months in the event that you suffer an extended job loss or a sudden accident takes place that prevents you from having access to money for an extended period of time.