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Doing these things can help you start the new year off right.
Vowing to improve your finances is one of the most common New Year’s resolutions, but it’s not always easy to know where to begin. Fortunately, it doesn’t always require huge changes, like saving a quarter of each paycheck.
There’s a lot of simple things you can do that will continue to reward you all year long. Here are three finance-improving tasks that will only take about five minutes.
1. Update your life insurance beneficiaries
Those who have life insurance should schedule an annual review, both to make sure they have adequate coverage and to update their beneficiaries. Beneficiaries are those who receive the death benefit after the policyholder passes, and outdated beneficiaries could cause all sorts of problems for family members left behind.
A person who’s recently divorced or been widowed may need to choose new beneficiaries and those who have welcomed another child into their families may want to update their list of beneficiaries to include the new addition.
Policyholders who aren’t sure how to make this change should reach out to their life insurer to learn more. If they have access to an online account, they may be able to make the change themselves. Or they may have to contact an agent for assistance.
2. Review your emergency fund
With the high inflation we faced in 2022, it’s possible yours emergency funds isn’t adequate anymore even if you never spent any of it during the last year. This fund is supposed to contain at least three months of living expenses to help you cover unexpected costs that arise. But now that most living expenses have gone up, you may need to bump up your emergency savings to avoid coming up short in a crisis.
You might also need a larger emergency fund if your household finances have changed significantly. Getting a new job or welcoming a new household member could increase the amount you need to save in your emergency fund. Conversely, if family members move out or your average monthly expenses have decreased, you may be able to get by with saving less.
3. Cancel unused subscriptions
Canceling subscriptions you’re no longer using is a simple way to add a little extra money to your bank account each month. It’s pretty easy for most people to review their monthly subscriptions because they receive bills for them frequently. But not all subscriptions bill you that often. Some may charge you every few months or annually, and these can be harder to track down.
It’s a good idea to look back through all of your bank accounts credit card statements for 2022 to make sure you haven’t forgotten about any subscriptions you’re paying for. These could be things like physical memberships to a gym or subscriptions to online services, like streaming platforms.
Taking the three steps above is far from a comprehensive financial review, but it can give you a good start. If you have a retirement account or a monthly budget you adhere to, continue reviewing those things as well to make sure you’re on track for your long-term goals. It doesn’t have to take a ton of time and it can help you identify small problems before they turn into big ones.
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