The New Year is a time to celebrate. For many of us, it can also be a time to start over, reevaluate and overhaul life for the better.

Of course, a lot of people already do this with resolutions, so I’m suggesting that this year, you vow to develop better financial habits as part of your New Year’s goals.

While we all know resolutions are notoriously hard to uphold, sticking to your financial goals can reap big rewards.

Here are a few items to get you started and set you on the right path this year:

Review your portfolio

How long has it been since you reviewed your investments and insurance coverage? Are they still on track for your needs?

Time flies. Life changes. And that makes it extremely important to periodically review all of your investment strategies to make sure they’re in line with your goals and lifestyle.

It’s also important to check your insurance policies to see if they’re up to date — and that you’re capitalizing on the best rates and coverage.

Draft an estate plan

Getting an estate in order is a vital piece to a setting up a sound financial foundation. It’s also excellent for peace of mind.

Unfortunately, according to a 2016 Estate Planning Awareness Survey, nearly half of Americans believe estate planning is only for the ultra-wealthy.

Sadly, this misinformation creates problems for far too many people at or near retirement.

Drafting a will and creating an estate plan can address how to transfer assets from one generation to another. (You might be surprised how many important assets you have!)

Having an estate plan in place also can help remove the guessing game for family members on items such as health-care directives, powers of attorney, designated beneficiaries and, in some cases, designating a guardian for children.

Don’t get emotional 

Too often we see nest eggs get crushed when investors make choices based on sentimentality rather than through a calculated plan based on goals and risk tolerance.

By carving out a diversified plan with a financial professional and then sticking to it, you can let your financial needs and goals drive your plan, rather than knee-jerk reactions or emotional attachments to individual holdings.

Eliminate debt

According to a 2016 Gallup Poll, nearly half of all Americans carry credit card debt. This can be especially dangerous for pre-retirees and retirees.

Debt can be a drag on your assets.
To help you manage debt, consider tackling the debt with the highest interest rate first. You may also shop for lower rates, negotiate with existing credit companies and/or cut back on expenses (wherever you can) to pay off balances faster.

Make a budget

Not sure where all your money is going? You’re not alone. When was the last time you sat down and made a detailed financial budget?

Start by taking a cold, hard look how much money you have coming into your accounts, versus what’s going out. This can be particularly important as you transition from a steady paycheck into retirement. Setting a budget can be an essential building block to maintaining a comfortable lifestyle throughout retirement.

Make 2018 a year of change by working to achieve your financial goals. You and your loved ones will sleep better at night knowing you’re headed down the right path — and preparing for your future.

Skip Johnson is an advisor and partner at Great Waters Financial, a financial planning firm with offices in Minneapolis, Richfield, Minnetonka, White Bear Lake and Duluth, providing comprehensive financial planning and strategic retirement solutions to pre-retirees and retirees.