5 money resolutions to make in 2016
Dec. 17, 2015 CNN Money
Here are more money moves experts recommend adding to your resolution list:
1. Pay off debt
With the Federal Reserve raising interest rates for the first time in nearly a decade, 2016 is the year to commit to reducing consumer debt.
Many credit card interest rates are variable, which means the annual percentage rate (APR) will likely rise as the central bank continues to raise rates.
“Those debts are going to get more and more expensive as rates rise,” said Christopher Krell, a certified financial planner at Cassaday & Company.
If you have several outstanding debts, he recommended prioritizing in order of highest to lowest interest rates when making payments.
2. Create an emergency fund
Part of the “saving more” resolution should include putting money aside to cover unexpected expenses or to help make ends meets in the event of a job loss.
Experts recommend stashing away three to six months of costs. “Where in that range you fall depends on your personal situation,” said Stuart Ritter, senior financial planner and vice president of T. Rowe Price Investment Services. “If you are single and/or at a job that might be more at risk, you want to be at the higher end of that. If you are in a dual-income household … you can be in the smaller range.”
Be sure to keep the money easily accessible, like a savings or money market account, he added.
3. Increase your retirement savings
Experts generally recommend contributing at least 10% of your income into retirement accounts.
If you can’t quite swing that much, don’t worry, you don’t have to make the leap all at once. “Every three months, increase your contributions by 1% to 2%,” suggested Kimberly Foss, certified financial planner and founder of Empyrion Wealth Management.