Start Smart! 7 Money Resolutions to Make in 2016

Let this be the year you get your household finances under control—in seven easy moves. 

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Pay off your credit cards. Save for this year’s family vacation. Get your retirement on track. No matter what your financial goals, now is the time to (really, finally) tackle them. Why? You’re starting fresh (tax-wise, anyway), you’re probably a little cash-shocked from the holidays, and you’re in a goal-setting frame of mind. Need more incentive? Try this: According to a 2015 Fidelity survey, 29 percent of people who made money-related resolutions at the start of 2014 actually achieved their goals, while 74 percent got at least halfway there. What’s more, half believed they were better off financially after a year’s time. Even better news: It’s not hard to get started. Check out this seven-strategy plan.

1. Build a budget. The first step in whipping your finances into shape is figuring out where your cash ends up each pay cycle. Fortunately, monitoring your spending habits is easy—no complicated spreadsheet needed. If you’re the pencil-and-paper type, crunch the numbers with a Dome Simplified Home Budget Book ($5; OfficeDepot.com). For a high-tech way to track every penny, use a budgeting tool such as Mint.com (register online for a free account). It pulls all of your personal financial accounts (like banking and credit cards) into one place, categorizes them, tracks them, and helps you create a spending plan. Nice feature: You can set up your account to send alerts whenever you’re close to going over in any category.

2. Shore up your rainy-day cushion. Sudden layoffs. Unexpected health bills. Hey, curveballs happen. Question is, are you prepared? Nearly 30 percent of people in the U.S. have no emergency savings, according to a Bankrate survey, and many of those who do simply don’t have enough. Financial experts recommend having enough cash in the bank to cover three to six months of living expenses—basically, everything you’d have to pay for in cash, after taxes, each month. At the very least, aim for $1,000 in a liquid account. To make it easier to reach your goal, set up automatic deposits on paydays to Upromise’s new GoalSaver account, which pays 0.80 percent on the balance. Tip: Accelerate your savings by socking your tax refund away immediately (the average refund was $2,704 last year).

3. Make a plan for tackling debt. Average credit card interest rates are hovering around 15 percent—all the more reason to get those IOUs under control. The best way to dig out from under: Start small. Researchers from Northwestern University found that you’re more likely to pay down your overall debt when you start with the smallest balances (and work your way up to the bigger ones) because those small but steady “victories” help you to stay motivated and keep going, until you reach your goal. Another idea: Use the free app ReadyForZero (iTunes, Android). Once you link your accounts (mortgages, credit cards, medical bills, etc.) to the site, it aggregates your debts and helps you come up with a plan for paying everything off.

4. Calculate your retirement number. Less than half of U.S. workers say they or their spouses have run the numbers to determine how much they’ll need to save to live comfortably in retirement, according to a survey from the Employee Benefit Research Institute. Not great: After all, how can you save for a goal you haven’t yet set? Fidelity recommends saving eight times your salary before you retire to meet basic income needs—aiming for twice your salary by age 40 (example: If you make $40,000 a year, shoot for $80,000), four times your salary by 50, and six times your salary by age 60. To be sure you’re on the right track, use an online savings or retirement calculator (try the one at troweprice.com), which will help you come up with the right savings rate in 15 seconds flat.

5. Find out your credit score. Those three little numbers matter—a lot. A solid credit score (excellent credit is 740 or more; good credit falls between 680 and 739) means you’ll win better rates on loans for homes, cars or college. Find out your digits by doing the math (for free) at CreditKarma.com. Not loving what you see? These tips can help boost your score: Pay your bills on time (OK, that’s a no-brainer), keep your overall credit card balance to less than 30 percent of your total available credit (getting too close to your limit can drag your score down, even if you pay on time), and don’t close your oldest accounts (it will shorten your credit history).

6. Bump up your 401(k) contribution. A 2014 Gallup survey found that 48 percent of Americans are relying on a 401(k) account as their main source of retirement savings, so make sure you’re getting the most from yours. At least 10 to 15 percent of your annual salary should be set aside. To reach that goal, contribute as much as you can to your company’s 401(k) plan, or very at least enough to get a full employer match, if your company offers it, which is essentially “free money.” Not the pro-active type? Ask your HR department about contribution auto-increases, in which your 401(k) deferral is automatically raised by a specified amount (usually one percent) at regular intervals (say, every year), until you hit that savings rate.

7. Get that will done. We know: You’ve been planning to get around to it, but this is one thing you can’t put off. If something happens to you, the state will decide what happens to your property, personal effects—and children. Make this the year you see an estate attorney and get a basic set of documents: a will (including beneficiaries, designated guardians for your kids, and an executor to carry out the provisions of your will), as well as a healthcare directive (or living will), which states your end-of-life wishes, should you become ill. It will cost you about $500, depending on where you live—pricey, but the peace of mind is worth every penny. You can also draft a document yourself at a fraction of the cost, provided that your situation isn’t complicated (say, a second marriage with stepchildren, or a family business) with an online program such as Legalzoom.com (for $69 to $109), or a downloadable software program such as Quicken WillMaker 2016 ($35 on Amazon).