NerdWallet’s Financial New Year’s Resolutions for 2013
The New Year is almost here, and it’s time to make some resolutions for 2013. NerdWallet compiled this list of common financial resolutions and how you can achieve them—we’ll be working on a lot of these resolutions ourselves over the coming months, too.
Spending and Saving
I will not pay any banking fees
Big banks charge an average of $117 per year, and a recent Pew study found that the average overdraft fee is $35. While few consumers intend to pay excessive banking fees, unexpected expenses can take a toll on your checking account. When you add up the monthly maintenance fees, out-of-network ATM fees and overdraft fees, it’s clear that some banks can eat a large chunk of your paycheck if you let them. You can find the checking account that fits your needs with the lowest fees through our checking comparison tool and our roadmap to free checking
I will finally stop complaining about my big bank and switch to a credit union
NerdWallet crunched the numbers, and it’s clear that credit unions are better for consumers than big banks (the same is likely true for community banks). With lower fees, higher rates, more ATMs and better perks, the choice to switch to a credit union is clear. Moving your money isn’t nearly as difficult as it may seem. We put together this simple seven-step guide describing how to switch to a credit union.
I will not let my money sit in a low-yield savings account
With interest rates at record lows, it’s difficult to find much above a 0.10% yield these days at a big bank. However, with a little searching, you can find rates that are as much as ten times higher at a credit union or online bank. NerdWallet’s rates tool can help you find the highest interest rates.
I will not waste my hard-earned credit card rewards points
If you have a rewards credit card, dedicate this year to maximizing your rewards by spending smart and redeeming responsibly—find your card’s most rewarding spending categories and dedicate your expenses accordingly, and check how many points you have after your holiday shopping. Additionally, review your rewards program. We’ve done the homework for you and laid out the pros and cons of each particular rewards program. Find out the best way to get the full value of your rewards – save for a flight, a gift card for your favorite store or even a statement credit.
Student Loans and Credit Card Debt
I will pay off my student loans
According to the New York Federal Reserve, Americans now owe more on student loans than they do on credit cards. Student debt exceeds $956 billion in total, and the average borrower graduating in 2011 owed $26,600. Don’t let student loans hang over your head. First, learn about your loans, then follow some steps for paying off student loans early and reducing your debt faster.
I will get out of debt
Americans are in $704 billion of credit card debt, with the average household owing $7,150 to credit card companies. Getting out of debt is hard, so think about the psychological factors that are holding you back. This year, research the proactive steps you can take, such as consolidating student loans or refinancing your mortgage. Remember, not paying off those debts will have serious consequences. Additionally, be sure to prioritize your debt according to which lenders charge the highest interest rate—if your student loans have a lower interest rate than your credit card APR, pay off the credit card first.
Planning for the future
I will start saving for retirement and finally rollover my 401(k)
Even if you never built up much of a nest egg in your last job, it’s always worth it to rollover your old employer-contributed retirement savings plan into an individual retirement account. Make 2013 the year you take action.
I will finally talk about money and estate planning with my partner and my family
Talking about money is hard for everyone – especially couples. But there are techniques that can make it easier. Remember that if you’re in a same-sex relationship, there are legal protections that you may need to put in place—do your research and meet with an attorney!
Additionally, you should make sure that your family is provided for in the unlikely event that you are injured. Your death isn’t likely to come soon, but writing your will makes sure that a burden won’t be put on your loved ones if you do pass away. Similarly, check in with your parents and other older family members—what plans do they have in place to protect their heirs and assets?
I will stop paying unnecessarily high broker fees
When it comes to investing, don’t let yourself become a statistic. A new NerdWallet study finds that 17 million investors are throwing away over $1.8 billion per year on unnecessary fees, which they could avoid by shopping around and taking their money elsewhere. Pledge to yourself to do the research on which brokerage account(s) will save you the most money – and then open one up to reap the benefits. Though the 3 largest brand name brokerages charge between $7.99 and $9.99 per trade, in reality you can invest more affordably at discount brokerages while receiving equally reliable service and speed. NerdWallet’s brokerage comparison tool lets you find the accounts that are best for your investing needs.
I will finally figure out how to diversify my portfolio
As a novice saver and investor, you’ve probably been told to “diversify” time and time again – but diversification looks different for every individual. The very first step is to understand the types of asset classes, or different groupings of investments that are available to you. Next, determine how much risk you want to take on; this widely recognized investing by age guide shows how to diversify your portfolio at different stages in your life.
New Year photo from Shutterstock