Your Money Checklist for a (Financially) Happy New Year

With the new year fast approaching, it's a good time to reflect on this past year—and come up with some goals for the next one. But whether or not you believe in setting New Year's resolutions, it's prudent to review your finances and ensure they're in good shape for the coming year. New Year's resolutions can be hard to follow, but setting some simple money goals will help you stay on track with your finances and promote monetary security.

If the word "resolution" sounds intimidating, think of it as an intention instead, suggests Brittney Castro, a certified financial planner at Mint. "With intentions, the idea is to be clear about your vision and what you want for yourself in the new year in all areas of your life," says Castro. "It becomes more about creating lifestyle changes versus feeling pressure to be perfect and restricting yourself to achieve your resolutions." Whatever your intentions may be for your money, here are some steps to take to set yourself up for financial success.

Review Your Assets

Retirement Savings

"Whether you're in your twenties or close to retirement, you should set aside time at the beginning of the year to evaluate if you're on track to have the amount of money you'll need to live comfortably by your desired retirement age, accounting for factors like inflation and increased medical costs," says Kristen Dillard, vice president of project management at Quicken.

Insurance Policies

Review all your homeowner's, renter's, auto, disability, and life insurance. Are the limits adequate? Should the deductibles be raised? Is there a less expensive policy with similar coverage? Are you taking advantage of all the discounts offered to you by your insurance providers?

Credit Report

Get a free copy of your credit report (the numerical summary of how much you owe and how promptly you pay your bills, which is examined by everyone from lenders to landlords) from annualcreditreport.com.

Investment Portfolio

Making sure that your asset allocation is in line with your investment goals is an essential part of managing a portfolio. The beginning of the year is an opportune time to do it, and the process may take only a few minutes. "Take steps to build your wealth by investing in your financial future through the stock market, real estate, or crypto—and finding ways to increase your income," suggests Castro.

Experiment With Budgets

Whether you use an app or online money management platform (such as Quicken or Mint), or good old pen and paper, you need to know where your money is going. Break your expenses down into categories—utilities, insurance, entertainment, clothing, etc.—to identify where you can scale back.

Budgeting can help you keep better track of your spending and help you see the bigger picture. "For example, by directing your monthly income into one account to pay for your commitments—your bills, debts, savings goals, and giving commitments—and keeping a separate account to use for your spending money, you can minimize your daily decision-making by just having one account balance to keep in mind," says Renato Mazziero, vice president of digital and design at financial services organization, Thrivent.

Set Short- and Long-term Financial Goals

Whether you want to be debt-free in 10 years or own a house in five, you're more inclined to save if you have specific goals. So write them down and determine how much money you'll need to save each month to reach them.

"Small goals, like increasing your monthly credit card payment versus only paying the minimum or cutting out unused streaming services can make a big difference," says Mazziero. "Repeat and enhance these types of minor yet consistent steps." Keep your financial goals reasonable, and you're more likely to achieve them.

If your goal is to get debt-free, start by paying down bad debts, such as high-interest credit-card bills and non–tax-deductible debt. While you're at it, enroll in automatic payment programs for bills when you can. You'll avoid costly missed payments, late fees, and negative marks on your credit score.

Boost Your Savings Account

Create a regular savings plan. Set up direct deposit from your paycheck into a savings account—you won't miss money you never see. "Automatically saving a specific amount each month is one of the single best ways to build financial stability," says Mazziero. Why? "Because people are often their own worst enemy when it comes to money and spending," he explains. The "set-it-and-forget-it" method will allow you to keep your spending in check and build your savings.

Boost Retirement Savings

If you can't afford to max out your employer-sponsored 401(k) or SEP plan this year, try to contribute enough to receive the full company match. If you don't have a retirement plan at work, fund a traditional IRA or a Roth IRA and arrange for contributions to be made automatically from your checking or savings account.

Make (or Update) Your Will

Get your estate planning in order. This ensures that your personal belongings, assets, and investments go to the beneficiaries you choose. In addition to building wealth, it's important to protect it too.

Ramp Up Your Emergency Fund

Make sure you have enough money in your savings account. Aim to sock away 6 to 12 months' worth of living expenses so that in the event of an emergency (a job loss, unexpected medical bills), you won't have to sell assets or rely on credit cards.