The start of a new year is one of the few times where people actively look for opportunities to improve their lives. This is the perfect occasion for Americans to take a big picture look at their financial situation, check-in on their financial goals and set some new ones. To help Americans set useful financial goals they can achieve in the coming year, members of the American Institute of CPAs’ (AICPA) National CPA Financial Literacy Commission share the following 2020 New Year’s financial resolutions:

1. Finally Create that Budget
“This is a perfect time to review past bank and credit card statements, and sources of income to create a baseline of income and expenses. Once you have this baseline, break down all expenses into ‘needs’ vs. ‘wants’; review each ‘need’ to confirm it is a true ‘need’ and then do the same for ‘wants.’ The goal here is to weed out any ‘want’ that is negatively impacting your overall budget. Americans who need help creating and managing a monthly budget can use the AICPA’s budget analysis calculator to run a report that will show them where their money is going and identify areas for improvement.” – David Almonte, CPA/CGMA member of the AICPA Financial Literacy Commission

2. Develop a Plan to Defeat Credit Card Interest
“The miracle of compound interest can work against you in the same powerful way it works for you. Sharpen your budget to designate an amount each month to attack those high interest rate credit card balances. Pick the strategy that works best for you – pay off the small balances first to build momentum or set your sights on balances with the highest rates to magnify your interest-reduction power. You’ll see the impact compound over the year, as the amount you owe decreases and you keep more of your earnings, allowing you to pick up the pace toward a debt-free future.” – Neal Stern, CPA member of the AICPA Financial Literacy Commission

3. Build That Emergency Fund
“Commit to adding to or creating an emergency fund with roughly 3-6 months’ worth of living expenses in an account earmarked for emergencies. Start by contributing whatever you can afford each pay period or month. Large sums of money are accumulated through small, consistent investments over time. Remember, without enough emergency savings, you won’t have an adequate buffer between you and high-interest debt. The key is to build up a large enough emergency savings account to effectively manage unexpected hardships.” – Robert Westley, CPA/PFS member of the AICPA Financial Literacy Commission

4. An Emergency Preparedness Plan Starts with Being Prepared
“In the face of a natural disaster, having a plan in place will help to ensure you can focus on what’s most important, while also minimizing the financial impact. There are some documents you will need right away, and others that you may not need right away but will be very difficult to replace if they are lost or destroyed. The key documents to get your emergency preparedness plan started are detailed in, ‘Disasters and Financial Planning: A Guide for Preparedness and Recovery.’ This guide is full of checklists and actionable steps for people to take to help ensure they are as prepared as they can be for the financial impact of a natural disaster.” – Neal Stern, CPA member of the AICPA National CPA Financial Literacy Commission.

Read the rest of the article at Business Wire (press release)