Now that we’re more than a quarter into the year, it’s likely that many investors have already lost sight of the financial resolutions they recently made. If your excitement to reinvigorate your financial plan is fading, now might be a good time to revisit these goals and establish an investing approach you can stick to all year long.
And if you failed to make any financial resolutions, you’re not alone. In fact, Capital One Investing’s Financial Resolutions Pulse Survey found less than one quarter (24 percent) of Americans were considering making a financial resolution this year. But it’s not too late to establish financial goals, or to remind yourself why you had these intentions to begin with.
Commit to your financial future now. While it’s easy to prioritize in-the-now purchases that deliver instant gratification, you may not want to wait until it’s too late to start building your financial foundation. Even if you invest what seems like a small amount, it has the potential to considerably add up (depending on the risks of your investing strategy and market activity).
[Read: Do Actively Managed Funds Really Pay Off for Investors?]
The earlier you begin, the more likely you are to grow your nest egg — so think about ways to start investing a portion of your everyday budget. Buying a premium cup of coffee twice a week totals $500 a year (or roughly $10 a week), so putting away incremental sums in a portfolio on a regular basis can be a critical first step and it may build over time.
For example, if you invested that $500 in your 401(k), you may accrue $21,000 over 20 years ($10,000 principal and $11,000 in investment gains). That’s one full year of college tuition! If you decide to start an investing account, consider setting up automatic contributions that enable you to invest a set dollar amount on a regular basis at a low cost.
Set simple, attainable goals. Your financial resolutions don’t have to be complicated or cause you to drastically change your lifestyle. For instance, maxing out your 401(k) contributions and your employer match is a straightforward change that may make a big difference down the line.
[See: 7 Ways to Tell if a Stock Is a Good Price.]
Unfortunately, it’s easy to overlook your 401(k) investments, and Capital One Investing’s Financial Resolutions Pulse Survey found 49 percent of Americans aren’t planning to increase their contributions to a 401(k) or other employer-sponsored retirement plans this year. If you don’t you think you can swing investing more in your 401(k) right now, one rule of thumb suggests slowly increasing contributions with each raise until you are investing 10 to 15 percent toward retirement.
Depending on your situation, increasing your 401(k) allocation in this manner may have a significant impact on how much your retirement savings may grow over your career.
Improve your financial knowledge. According to Capital One Investing’s Financial Resolutions Pulse Survey, younger investors’ (ages 18-24) top financial resolution is improving their understanding of investing. If you know you want to create a portfolio but aren’t sure how to get started, access free online resources or talk to a financial advisor to learn more about the markets and strategies that may help you build your plan.
[Read: 5 Signs Your Dividend Is Doomed.]
If you already have a portfolio but are considering making changes to reflect your financial resolutions, you may want to review your strategy to make sure you understand any recent gains and losses, leverage educational tools, or talk to a professional to determine if you need to rebalance or tweak your strategy to reach those goals. Remember to also take the time to learn about the risks associated with your investments, as there is a potential for loss.
There are many ways to stay on track throughout the year so you can end 2016 as you started it — motivated and inspired. For instance, you may want to consider gauging your progress on a regular basis to make adjustments where necessary. Remember, checking in on your portfolio’s asset allocation mix and risk level throughout the year may help you make sure that you won’t encounter any surprises later on.
Setting attainable goals now may help you prioritize your financial fitness for the next 365 days and beyond.
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3 Investing Tips to Last for the Next 365 Days originally appeared on usnews.com
