Today is part two of our three part series, 15 Ways to Improve Your Finances in the New Year. Part 1 covered the first five ways to improve your finances. Today we will discuss five more ways to improve your finances.
Personal finance isn’t solely about things that directly impact your income and expenses. A couple of the things I will discuss today, such as updating your resume, have a more indirect affect on your finances.
If you have an updated resume and LinkedIn you are generally more likely to be found by recruiters, apply to jobs, and jump on career opportunities. Updating your resume may not immediately increase your income, but it likely will have a positive impact on your finances long-term. In other words, keep an open mind to suggestions and think about how they might impact your own finances, both short- and long-term.
6) Look into Life Insurance
One of my top priorities in 2014 is to get life insurance. I have a (very) small plan through my work that gives me something like $52,000 of coverage. Now that I have a mortgage and student loans I would not want my wife to have to deal with this debt in the event that I pass away.
I really like Suze Orman’s approach to life insurance. In one of her books she wrote that most people don’t have nearly as much as they should. Not only should your policy cover your debts such as a mortgage, car, student loans, etc., but it also should be enough so that the surviving partner doesn’t have to work for a long time if they choose.
Life insurance isn’t fun to think about, but I also think it’s something that everyone should make it their top priority if they have a significant other and/or children in their lives.
7) Write Down your Goals and Get Motivated
I love setting goals, specifically at the beginning of the new year. I wrote down some of my goals for this year at a high-level on New Year’s Day. Having these goals written down makes me motivated to achieve them.
Setting goals can help you find motivation to achieve them. For example, a long-term goal of mine is to have enough income streams outside of my 9-5 job to live off of. This obviously won’t happen overnight and for many people will never happen. Spending time thinking about this long-term goal motivates me to set smaller goals, such as developing small businesses in my ‘spare’ time that can generate income and/or be sold for a lump sum at a later date.
I highly recommend checking out Cat’s post How to Set Realistic Goals for the New Year. I also recommend my post How to Manage and Prioritize Your Time Better because so many goals are not accomplished simply because we “don’t have time for them.”
8) Update your Resume and LinkedIn
Another thing that you should do from time-to-time is update your resume and LinkedIn profile. When you are happy with your job and have no intention of applying to jobs you usually never get around to updating your resume or LinkedIn, but what we don’t think about is how this is the best time to get update them. If you lose your job or are unhappy with work, it’s much easier to start looking if you already have a resume completed and ready to go versus having to scramble to put one together.
I’m a big advocate of thinking about your next job while you are still in your current job, even if you are happy. Updating your resume will help you think about what skills and experience you have and in turn what skills and experience you are lacking.
Sally, another writer on our site, wrote a great article about improving your LinkedIn profile as well as a post sharing four useful resume tips. If you’re like me and have put off updating your resume and LinkedIn, make it a priority this year.
9) Earn Side Income
If you’ve been reading Young Adult Money for more than a month or two, you know that earning side income and building income streams is one of my favorite topics. While there are a variety of ways I make side income, the primary one has been this blog. I now spend a large majority of my free time working on Young Adult Money and planning my next couple online projects. Earning a side income on top of my 9-5 job has been huge.
There are almost an unlimited number of ways you can make money on top of your 9-5 or part-time job. Here are 5 ideas. While working a part-time job or doing contract work is definitely better than not working a side hustle, I personally prefer side hustles that involve creating a small business that can be later sold. This means you are not only generating income each month but also setting yourself up for a lump sum payment down the road.
I’m personally biased towards blogging as a side hustle because I can do it from the comfort of my home, the coffee shop, or even the beach, but that doesn’t mean it’s right for you. Find a side hustle you enjoy doing in your spare time and you will be much more likely to stick with it.
10) Open up an Individual Investment Account
Opening up an individual investment account should be your next step after you’ve built an emergency fund and started to contribute to a retirement fund. The nice thing about an individual investment account is that you can put money in and take money out as you please. I’m not advocating day-trading, but if there’s a specific company you like you can pick up some of their individual stocks versus investing in an index fund or mutual fund.
If you have a lot of cash in savings and regularly contribute to your retirement account, consider opening up an individual investment account through a company like ETrade. If you don’t want to buy individual stocks you can always stick to ETFs or mutual funds. While I like ETFs, I also have a few companies that I’m considering purchasing individual stocks in because I like their long-term potential to grow as a company. I also really like the idea of dividend income as a passive income stream and hope to one day make enough on dividend income to live off of.
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Do you plan on doing any of these things in the New Year?
Look for part 3 on Thursday and check out Part 1 if you haven’t already for more ways to improve your finances in the New Year.
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Photo by Ramon Cutanda Lopez
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6, 8 and 9 are all on my list! similar to you, I have life insurance through work but it isn’t much. I have been avoiding looking into this because I feel like it is going to be a tonn of work to research. Before we have children I also want to get a will created. Not fun to think about but I want the peace of mind that if soemthing happens everything will be taken care of. Great article DC!
BudgetforMoreI hear you about it being a ton of work. It’s definitely on my to do list. At the very least I hope to get a few posts out of it ;)
Great post, DC! We are strongly considering opening up an investing account this year. We have a bit more educating ourselves to do first, but it’s definitely on our list.
Laurie TheFrugalFarmerI definitely have a lot to learn when it comes to investing, but I did read about it quite a bit when I was younger. I forgot some of it and some of it isn’t relevant anymore, but I would like to get back into analyzing stocks and investments. I was a finance major, after all!
These are all solid things to be doing DC, especially #6 as it is so often overlooked. I’m working hard at #9 personally and looking forward to seeing where that goes. I just wonder at what point it stops becoming side income though. ;)
FrugalRules Haha I think #9 becomes more than side income when it reaches full-time income levels. For example, Peter from Bible Money Matters essentially replaced his wife’s income and now he brings in a “second full-time” income. That’s my goal for the time being.
I have a decent amount of life insurance from work…but with a little baby. I probably should have look into increasing my coverage. I’d definitely need to learn more about making money through blogging.
Andrew LivingRichCheaply I think with the debt I have and the fact I’m married now it really makes sense to get more life insurance. If I had kids I would want even more!
These are all great!
I seriously need to update my LinkedIn profile. It keeps getting pushed further and further down the list.
Holly at ClubThriftyPriorities! I also have not prioritized my resume or Linkedin at all over the past year. I really need to get on that and get organized.
Good ones in this part DC! I need to get more life insurance. I have an OK policy through work, but need to get more.
DebtRoundUpThanks Grayson! I’m in the same boat with the life insurance. The amount I get from work doesn’t cut it imo.
Now this list makes me feel a bit better. I am doing/have done these except number 10. I will have to finish building the E Fund first and then we can go from there.
BorrowedCentsI hear you on #10. Emergency funds are much more important than individual investment accounts.
You can hate on Suze all you want, but I also totally agree with her life insurance advice. I remember watching her show once and there was a young widow with a small child on whose husband had been murdered in a random crime. She had been a stay at home Mom. Her husband had made a good salary and had a million dollars in life insurance and she was asking how to invest it. it worked out that with their assets, she could invest this money and be able to stay home indefinitely. I can’t imagine if that had happened any you then had to put the kid in day care and go to work or even worse, lose your home.
Eyesonthedollar Terrible story, but I’m so glad they had the policy. Definitely makes you think twice about putting life insurance on the back-burner.
Getting life insurance is on my list as well. I watch Suze Orman every week. She has sound advice that has helped me quite a bit.
Raquel@Practical CentsI think Suze Orman has awesome advice and I used to watch her show quite a bit. Not sure why I don’t anymore, just haven’t gotten around to it in a while.
I would also add that if you have a Roth IRA option, open one before you open a taxable trading account. I made that mistake many years back and I still regret it!
Excellent tips David!
moneyconeThanks for sharing your advice!
Thanks for the reminder to update my resume and LinkedIn… I usually wait until I’m searching for a job, and that is NOT the right time to be thinking about those tasks.
DonebyFortyI think a large majority of individuals wait to update their resume and Linkedin until they need to. It’s so much easier to do it every few months versus once every few years.
Great tips, DC. I am very happy that life insurance is one of your goals this year. It is something too many people overlook or rely on the life insurance provided through their employer. I generally encourage people to consider buying their own life insurance and to consider their employer life insurance as gravy. Most employer life insurance is not portable so if you leave your job, you lose it. Term life insurance is very affordable, particularly if you can buy it when you are young and healthy. :)
More great tips David! I have actually had a number of friends who were given job offers through LinkedIn because their profiles came up in a hiring manager’s search even though they weren’t looking for a job. And I TOTALLY agree with life insurance! Most people definitely do not have enough, and it is easier and less expensive to obtain the younger and healthier you are.
I would really like to create a more detailed outline of my goals for my blog. I’d love for it to generate side income, and I’ve been putting off researching how to monetize it for a while. I also need to open an IRA this month. I think it’s good to update your resume while you’re working, also because your duties are fresh in your mind. Sometimes it’s harder to recall all the things you did after the fact.
I think it’s important to keep an updated resume because it can lead to a better job that you might not even realize. Your resume is usuallly sitting in some online job search and recruiters will eventually come across it. You might as well keep it up to date so they have the most pertinent information. This could lead you to an exciting new job that you didn’t even know you were a fit fo. If you absolutely have no inclination of leaving your current job, it provides an ego boost. I feel much more confident asking for a raise when I have calls coming in from rivals wanting to poach me.
This list is very helpful. I always feel overwhelmed when I am setting goals for the year. This list helps me narrow my choices. Thanks.
I’m totally guilty of only updating my resume when I’m looking for a job. I need to update linked in and my resume this year (in the next month or so). I’m not necessarily looking for a new job right now, but you never know when a good opportunity will come your way. I also need to look into exactly how much life insurance both bf and I have. We both have policies for work but I suspect neither policy is nearly as large as is should be (god forbid something happened to either of us).
Updating your resume every January would be a lot easier than the mad scramble when an amazing opportunity floats your way! I had to do mine in December and it’s always such a tedious task.
Aside from life insurance, I think we should definitely look at the possibility of purchasing a long-term care insurance. Life insurance is great but what happens when you live long enough to see the familar warm faces of your family members to blur in your mental images? We all hear people talk about how they don’t want to become a burden after they were dead but nobody considers the possibility of senility and everything that comes with it.
Maria Castor Handley @ CompleteLongTermCare
http://www.completelongtermcare.com