Personal Finance

3 Simple Steps to a Financially Strong Start in 2016

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By Jamie Ebersole

Learn more about Jamie on NerdWallet’s Ask an Advisor

Many of us have great ambitions to start the new year on the right foot financially. But many people fail to meet their goals or keep their new year’s resolutions because they are too ambitious. Changing habits in a short period of time requires a level of focus and commitment that many of us can’t afford in our hectic lives.

But resolutions don't have to be big to have an impact. Small wins early on can help boost your confidence and prepare you for the year ahead. Here are three simple steps you can take today to reduce your stress and improve your financial well-being for the rest of the year.

1. Talk to your advisor

Discuss major changes in your personal and professional status with your advisor. Are you changing jobs? Have you added a new family member? Are you retiring or have you received a windfall? In most cases these changes will have a significant impact on your tax situation, your cash-flow and your insurance and estate-planning needs.

The earlier you account for them in your planning, the more beneficial and less stressful their impact will be. A little planning up front can go a long way toward alleviating surprises down the line.

2. Organize your taxes

Collect and keep your tax information in good order from the outset of the year. Taxes can be a big time sink, so many of us delay getting our information together until the last second. By organizing your financial information as it arrives, you can alleviate the mad dash to get all of your documents to your accountant on time.

Employers and financial institutions should deliver all of your tax information by the end of February. By staying on top of the incoming mail, you can get your tax information to your CPA or tax preparer by early March. This will have a threefold benefit: Your CPA will appreciate your efforts to get things in early, you can easily file your return by April 18, and in many cases, you can get your refund before the month is over.

3. Automate incremental changes

If you automate savings, incremental changes will be easier to achieve. For example, you can automate your contributions to your 401(k). Some employers also allow you to a set up an automatic annual increase in your contribution amount, so you’ll save more over time. You can also automate monthly deposits to savings plans, like a 529, or other investment accounts. If you set up small, monthly automatic deposits to a savings account, you can accumulate enough funds to make an extra payment toward a student loan or mortgage.

These steps can seem small, but over the course of a year, they can significantly improve your finances.

Small wins, big results

We all want to start off the year inspired, not hopeless. We also want to make sure we achieve our goals. The best way to accomplish this is to make sure you succeed with easily attainable steps at the outset. These small wins at the beginning of the year will help you stay committed to improving your financial well-being for the rest of the year and beyond.

Jamie Ebersole is the founder and CEO of Ebersole Financial in Wellesley Hills, Massachusetts.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.