Five Financial Resolutions to Make and Make Happen

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Have you thought about money issues for 2016? Probably. An overwhelming 72 percent of adults surveyed for Fidelity's 7th annual New Year Financial Resolutions Study believe they'll be better off, money-wise, in 2016 than they were in 2015.

Among the most popular resolutions: saving more (54 percent) and spending less (19 percent). As for whether making such vows really work, 45 percent of those who did so last December say they now boast "less debt."

If you are over age 40 there are a number of items to include on your resolution list that needs to happen for long term success. Many of these resolutions deal with your future retirement. Yes, that is coming and it will come much sooner than you think.

Here are a few items to make happen in 2016:

1. Pay yourself first and pay yourself as much as you can. If you have a 401(k), 403(b), 457 Thrift Plan, IRA (Roth or regular) or SEP or solo 401(k) you need to contribute as much as possible.

The contribution limits for 401(k), 403(b), 457 Thrift Plan are $18,000 in 2016 (not including employer contributions). The limit for a personal IRA or Roth IRA will be $6000. For a Solo 401(k) or SEP, the 2016 limit is $53,000. Try to afford putting as much as possible in these plans. Then don't touch that money till retirement.

2. Get Long-Term Care Insurance. It is wonderful to have all the savings in those above plans but the big risk is blowing through all that money due to the high costs and the likelihood you will need extended Long Term Health Care. Long-Term Care Insurance is very affordable but look for a specialist to help.

Health insurance and Medicare (health insurance for those 65 and older) pay virtually nothing toward care related with help with activities of daily living or supervision due to memory issues. People need Long Term Health Care due to illnesses, accidents or the impact of aging. The US Department of Health and Human Services says if you reach the age of 65 you will have a 70% chance of needing this type of care. So do it now while you are healthy and premiums are much more affordable.

3. Pay off debt. Try to eliminate as much debt as possible before you retire. Paying off your mortgage will significantly reduce your monthly housing costs and make it easier to get by with less retirement income. Even making one extra payment a year will help.

4. Prepare for unexpected things that will cause financial hardships. Boomers are many times blindsided by layoffs and offers for early retirement. Sometimes a health event of a parent will necessitate an early retirement or move you to part-time employment (another reason YOU should have Long-Term Care Insurance to prevent you from placing this burden on your adult children).

Having an emergency savings account and funding it is always a good idea. You should have at least 3 to 6 months savings placed into this account. Set up a money market account and transfer money every paycheck.

5. Stop Wasting Money. You may be surprised by how much money you waste every day. Do you really need to go to Starbucks for coffee … every day? Can you make coffee at home or perhaps get something much less expensive like Dunkin' Donuts or McD’s?

Look at things like bank fees. Changing banks may save you money every month. Look at your cable or satellite TV bill. Do you use every paid service (HBO, ShowTime, Starz)? Maybe just keep one you watch often. Free TV exists with an antenna. You can get HDTV free and local stations often have digital sub-channels with other programming available … again free. Same thing with radio. If you are paying for SiriusXM Satellite Radio look for ways to save. One would be just have it for your car you have radios at home. Get a smaller, less expensive package call and ask for a discount. Most of the time you will get one! Also, remember, you have free radio at home and in the car (AM and FM). Plus, if you have a newer car you also have HD radio and many FM stations have additional sub-channel stations which offer programming all free!

Eating out often? Don’t forget coupons. Many are available online. Also, consider eating out less. Although, for many people, the cost of buying food and preparing food at home costs about the same as eating out.

Now, how about that cell phone? How much are you paying? Do you use all your minutes and data? Look for packages for home landline and cell phone. Some companies offer combo packages which also include internet and TV.

There are many other things that could be added. But with anything, if you add too much to the list you will not complete any of them. Stick to these and plan to make 2016 a great year.

Remember, getting your resolutions done at the start of the year is ideal. But don't make that an excuse for not doing them at all. We get busy and if you start these things later in the year that is fine. Just start making things happen. Have a Happy New Year.