ROCKFORD (WREX) — According to WalletHub, an estimated 97 million Americans have a 2021 New Year's resolution about money and finances, a sharp increase over last year.
Saving more tops the list of WalletHub's list of financial resolution, followed by paying off debt. Forty-seven percent of Americans believe 2021 will be better for their wallets than 2020.
To help Americans stay on track, moneyrates.com identified 7 essential steps to achieving your financial resolution.
- Create a budget
- Build an emergency fund (Key word: build. It takes time.)
- Open a savings account
- Start a debt relief or consolidation program
- Get a balance transfer credit card
- Talk to a financial advisor
- Check in throughout the year (set a reminder for a self evaluation once a month or once a quarter)
Jeff Lewis is a financial advisor at Savant Capital Wealth in Rockford, who told 13 WREX his big takeaways headed into the new year.
"I definitely think 2020 highlighted the importance of having some sort of emergency fund or short term savings in the event of job loss or furlough," he said.
Joe Larkin, the Branch Manager at Northwest Bank in Machesney Park, echoed the same sentiments of having a plan.
Larkin says a simple budget to have is to put 50% of your paycheck towards needs, 30% towards wants and 20% towards savings.
That's gonna help you plan for long-term expenses well as unforeseen circumstances that do come up. The 50% category for the need, that's just a really good standard as far as how much you have in your paycheck is gonna go towards ComEd, Nicor, mortgage, things of that nature," Larkin says.
Lewis said when it comes to making a financial resolution, it's important to set small goals and slowly increase expectations over time. If you start with a goal that's too big, Lewis said you might get overwhelmed and fall off track.
"I always tell people start with one month of expenses that's a little bit more realistic and build up off of that," he said.
Larkin says for those who have received a $600 stimulus check, to use it towards paying off any debt.