About half of all Amer­i­cans make New Year’s res­o­lu­tions. Along with exer­cis­ing more and eat­ing bet­ter, many peo­ple aim to get a bet­ter han­dle on their finances.

If you’re in that camp, we’re here to help. Here are some sure­fire steps to cre­ate a more finan­cial­ly secure future for you and your loved ones.

  1. Cre­ate a budget.

The first step toward get­ting finan­cial­ly fit is to cre­ate a bud­get. Every­one needs an under­stand­ing of how much they’re earn­ing, how much they’re spend­ing, and how they’re going to meet their cur­rent and future finan­cial goals. The Fed­er­al Trade Com­mis­sion has infor­ma­tion on how to cre­ate a bud­get. Once you out­line your bud­get, make sure to stick to it. Also make sure to reg­u­lar­ly revis­it it and adjust it as needed.

  1. Con­trol and min­i­mize debt.

Your bud­get will help you keep track of where your mon­ey is going. It will also help you iden­ti­fy areas where you’re over­spend­ing. It’s crit­i­cal to cut out any excess spend­ing. Also work to min­i­mize your debt load. So long as you have debt, you’ll be respon­si­ble for pay­ing inter­est. (So def­i­nite­ly make an effort to pay more than the min­i­mum on your cred­it card each month!) Set goals to pay off your debt and track your progress.

3Auto­mate an emer­gency fund.

An emer­gency fund is mon­ey you set aside for unfore­seen expens­es. They could be an unex­pect­ed home or car repair or a job loss. Most finan­cial pro­fes­sion­als rec­om­mend hav­ing three to six months of basic liv­ing expens­es in an emer­gency fund. How­ev­er, it takes time to build those funds. Auto­mate the process by hav­ing part of your pay­check deposit­ed into a spe­cial emer­gency fund account. You can also have your bank auto­mat­i­cal­ly trans­fer funds to a sav­ings account ear­marked for emer­gency expens­es. Even a small amount each week can help you get there.

  1. Get life insur­ance to pro­tect your loved ones and review it annually.

Life insur­ance pro­vides your loved ones with mon­ey to main­tain their lifestyle if you die. This mon­ey is known as the death ben­e­fit and it can replace your income, pay off debts like a mort­gage, and cov­er funer­al costs. It can also help with future expens­es like col­lege tuition, retire­ment, and much more. Experts rec­om­mend hav­ing life insur­ance that equals between 10 to 15 times your gross income. For a work­ing idea of how much you need, use an online cal­cu­la­tor like the Life Insur­ance Needs Cal­cu­la­tor. Then work with an insur­ance pro­fes­sion­al to explore your options and get the right cov­er­age. Make sure to review your life insur­ance annu­al­ly or after a big life change like buy­ing a new house, hav­ing a baby, or chang­ing jobs.

  1. Pro­tect your pay­check with dis­abil­i­ty insur­ance and review it annually.

Dis­abil­i­ty insur­ance is one of the best ways to pro­tect your most impor­tant asset: your pay­check. Dis­abil­i­ty insur­ance typ­i­cal­ly replaces 50% to 70% of your earn­ings if you’re unable to work due to a dis­abling ill­ness or injury. An easy way to cal­cu­late how much you might need is to use an online cal­cu­la­tor like the Dis­abil­i­ty Insur­ance Needs Cal­cu­la­tor. Make sure to review your cov­er­age with your HR depart­ment or insur­ance pro­fes­sion­al as your salary increases.

  1. Keep ben­e­fi­cia­ries up to date.

It’s impor­tant to update the ben­e­fi­cia­ries on your finan­cial accounts like your life insur­ance or 401(k). This is espe­cial­ly true after major life events such as a mar­riage, divorce, birth, or death. Not hav­ing the right ben­e­fi­cia­ry can lead to mon­ey going to the wrong per­son or delays in dis­burs­ing money.

  1. Put a will in place.

A will is a doc­u­ment that allows you to spec­i­fy cer­tain things after you die. They can include how your assets will be dis­trib­uted, who will make sure your wish­es are car­ried out, and who will take care of any minor chil­dren. With­out a will, the state could decide who gets your chil­dren and more. For­tu­nate­ly, the process of cre­at­ing a will is not as com­pli­cat­ed as many peo­ple believe. And it’s well worth it since it spares your loved ones from all kinds of headaches. A lawyer can help you cre­ate a will and dis­cuss oth­er issues like pow­er of attorney.

8. Save for retirement.

Tap into any  avail­able resources to help grow your retire­ment nest egg. That includes enrolling in your company’s 401(k) plan or look­ing into oth­er retire­ment sav­ings options like an IRA. Def­i­nite­ly take advan­tage of any “match­ing funds” your com­pa­ny makes to your 401(k) con­tri­bu­tions. Match­ing funds are like “free mon­ey.” What’s more, the con­tri­bu­tions you make to your 401(k) reduce your tax­able income.

Make 2021 the year you become finan­cial­ly fit by fol­low­ing these steps. Each one will cre­ate a bet­ter, more pro­tect­ed future for you and your loved ones.

By Mar­vin Feldman

Orig­i­nal­ly post­ed on lifehappens.org