5 Financial New Year's Resolutions
From retirement to sustainable investing, here are some ways you can start on the right financial foot.
There’s nothing better than a clean slate, right?
The new year is often the kickstart we need to take off and achieve our personal goals. But what about our financial ones?
If you’re just getting started, take a page out of our book. Here are five financial resolutions for beginners.
1) Pay Closer Attention to Your Retirement
At Morningstar, we promote year-round about the importance of preparing for retirement. This year is no different. Start out by getting ahead--or catching up.
- Your 401(k) Plan Guide These employer-sponsored savings vehicles may not be ideal, but they can still help millions of Americans secure their retirements.
- Are You Behind on Saving for Retirement? There's a path forward, no matter when you start your retirement-plan contributions.
- How to Save More and Need Less for Retirement Lifestyle upgrades add up and have consequences for you today and tomorrow.
Watch: How Gig Economy Workers Can Save for Retirement Here are four things to keep in mind.
Listen: Fritz Gilbert: Early Retirement Made Simple The author and blogger shares tips for finding balance, purpose, and friendship in retirement.
Bonus: Do You Need a Side Hustle? What should you consider before picking up an extra job.
2) Consider an HSA as a Savings Option
IRAs and 401(k)s aren’t the only places you can store extra cash. Another good place to stash your dollars is a health savings account. Here’s how you can take advantage of this vehicle.
- What Is a Health Savings Account? All you need to know about HSAs, the popular account used to cover healthcare expenses.
- 5 Tips for Getting the Most Out of a Health Savings Account Maximize the benefits of these accounts.
- Can You Save Too Much in a Health Savings Account? Even savers whose assets exceed their healthcare outlays have some escape hatches.
Watch: The Best Accounts for Heavy Savers An HSA's tax benefits are hard to beat, but there are other options as well.
Listen: Andrew Biggs: Create a Thrift Savings Plan for the Masses The economist and Social Security expert discusses whether or not there's a retirement crisis, and how the U.S. government's retirement plan could be a model for how low- and middle-income workers save.
Bonus: The Psychology of Saving Habits What helps and hinders different types of households' saving behaviors.
3) Revisit Your Portfolio
When it comes to our investments, it’s easy to settle into the “if it ain’t broke, don’t fix it” mentality. Give your portfolio some TLC with these tips on diversifying, rebalancing, and more.
- Pinning Down Portfolio Rules of Thumb Investing can be complicated, but common portfolio guidelines can be a good starting point.
- How to Conduct Your Own Portfolio Makeover Follow these eight steps to an improved, streamlined, and more tax-efficient portfolio.
- Tailoring Your Portfolio When One Size Doesn't Fit All Consider adjusting your portfolio's mix to get a more customized fit.
- Why Rebalancing (Almost Always) Pays Off This year's turbulent market was yet another reminder of the power of portfolio rebalancing for risk reduction.
- Why Portfolio Diversification Still Works Despite the recent rise in correlations across asset classes, it still makes sense to spread out your bets.
Watch: How to Diversify Your Portfolio Diversification strategies that worked in the past may not work in the future.
Listen: Phil Huber: Finding an Edge in Alternative Investments The blogger and CIO of Savant Wealth Management discusses his new book on alternative investments amid a sobering outlook for the traditional 60% stock/40% bond portfolio.
Bonus: Special Report: Diversification Strategies Why diversification matters and how to hone your approach.
4) Invest Sustainably
As an investor, how can you make an impact? You don’t have to look too far to find an opportunity—just look at your portfolio. Here is how you can invest with environmental, social, and governance factors in mind.
- 4 Steps to Add Sustainable Investing Strategies to Your Portfolio Your guide to uncovering what your sustainability goals look like and how to put them into practice.
- Interested in Sustainable Investing? Here's What You Need to Know About Sustainable Funds How to tell different ESG factors apart in your investing decisions.
- Not All Sustainable Funds Are Equally Sustainable Morningstar's ESG metrics reveal the standout funds in the space.
- How Can You Invest in Climate Funds? Uncover what climate solutions can fit into your portfolio.
Watch: How to Build an ESG Portfolio Consider your ESG focus, goals, and asset allocation, for starters.
Listen: Michael Jantzi: Making 'Informed Choices' in Sustainable Investing The CEO of Sustainalytics discusses the evolution of the ESG movement, the regulations and rule-making behind it, and the future of sustainable investing.
Bonus: What Is Greenwashing, and Answers to Your Other Questions Sometimes it's an exaggeration of ESG intentions, but greenwashing can also stem from different definitions of sustainability.
5) Pick Up Good Habits
Budgeting, saving, and other financial tasks don’t have to be daunting. It can be a lot simpler than that: forming a good habit. Find what works for you and your finances with help from Morningstar.
- The Power of Financial Habits Adopting mental shortcuts can help you stick to a budget.
- First Job? How to Create (and Stick With) a Budget We show you how to set up a budget that aligns your spending with your goals and values.
- How to Pay Down Debt Tackle debt fastest with the 'avalanche' method, or get psychological wins sooner with the 'snowball' strategy.
- How to Set and Invest Your Emergency Fund Here's how to figure out how big your emergency fund should be and how you should invest it.
Watch: Short Answer: How to Create a Budget If you're just starting out, don't wing it with your expenses.
Listen: Sarah Newcomb: 'I Love Rules of Thumb' The director of behavioral science at Morningstar discusses the value of smart shortcuts, why social media makes people feel bad about themselves, and how the pandemic changed how Americans save and spend.
Bonus: My No. 1 Money Lessons Morningstar experts reflect on the money lessons they would have wanted their younger selves to know.
Stay Up to Date
Who's to say what is simply a fad or here to stay? Stay in the loop on the latest trends in finance with these resources.
- Best Investing Podcasts for Beginners Check out these recommendations from Morningstar's employees.
- 7 Great Investing Books for Beginners Want to get smarter about investing? Check out some of these books.
- Why You Don't Have to Convince Gen Z to Invest Sustainably We've grown up knowing it's a primary concern, not secondary.
- The Next Generation and Social Media's Role in Financial Advice A recent incident on TikTok shows just how easily, and willingly, the next generation will call out bad behavior.
Watch: How to Begin Investing
Listen: Alan Moore: What Millennial Investors Want The XY Planning Network co-founder discusses serving younger clients, the trading frenzy in individual stocks and cryptocurrencies, and the future of a fiduciary standard.