A lot of us start the new year focusing on goals and any lifestyle changes we might want to make, like weight loss, traveling more, or spending more time with family, but it’s also a great time to review your finances to be sure you are on track for a successful year.

No matter what goals you set for yourself getting your finances in order should be one of them. Here are a few areas that you can look at and adjust if needed to start the year off on the right foot.

Check your Beneficiaries

Life insurance policies, retirement accounts, bank accounts, and brokerage accounts can all be left to a designated beneficiary. If you don’t choose beneficiaries for your assets, then the decision will be left to a court or financial institution. Don’t let that happen, you should choose where your assets will go so it is important to review each of your accounts to be sure they are up to date. A lot can change in a year, marriages, divorces, births, and deaths can all change how your assets will be distributed.

Review Credit Card Debt

If you are starting the year with credit card debt create a plan to pay it off. Credit card debt can carry a high interest rate, make it a top priority to pay off any debt with a high interest rate.

If you don’t pay your balance in full each month you are paying interest which is a huge waste of money. Use your credit card as a tool to build credit and earn rewards. Don’t put anything on your credit card that you cannot afford to pay in full each month. Choose a credit card that has no annual fee and offers reward points. Establish and contribute to an emergency fund for unexpected expenses instead of charging those to your credit card.

Consider transferring to a zero-interest credit card. You pay no interest for a promotional period, typically 15 to 21 months. Take that time to aggressively tackle the debt.

Create a Budget

If you don’t already have a budget setup, consider doing so. A budget allows you to create a plan and track where your money is going each month.

Setup an Emergency Fund

An emergency fund is money you have on hand to cover emergencies and unplanned expenses, having money in an emergency fund ensures that you will be prepared for a sudden expense, and you can handle those expenses more easily. Unemployment, illness, family emergencies and home and auto problems can happen without warning. Most financial experts recommend having enough money in an emergency account to cover 3-6 months of expenses. If you lose your job, you should have enough money in your emergency fund to cover your monthly bills. Having this money allows you to pay your bills while you are out of work without going into debt. Add up your monthly expenses and multiply that by the number of months (3-6) you want to save for. That number is the amount of money you want in your account.

Update Your Estate and Insurance Plans

If you don’t have an estate plan the new year is a good time to set it up, if you already have a plan in place review it and make any necessary changes and updates. The plan should consist of a Will/trust, Durable power of attorney, Beneficiary designations, Letter of intent, Healthcare power of attorney and Guardianship designations.

Review your insurance policies including life insurance, homeowners and rental insurance and auto insurance to make sure your adequately covered and any changes such as home improvements have been added to your policies. It is also a good time to shop around to be sure you are getting the best coverage at the most cost-effective price.

Make Saving Money a Priority

If you are not currently saving enough money review your budget and make it a priority to set aside a designated amount of money each month. Automatic contributions are an easy way to transfer money into your saving accounts. Any amount is better than nothing and when it is automated you don’t have to think about it. Also shop around to find the best savings account interest rates.

Consider putting more money into your retirement accounts as well. Just a small increase can add up over time. If you received a raise at work, you might put it toward retirement instead of increasing your spending.

If your employer offers a 401(k) match, be sure you contribute enough to get the full match since it’s basically free money. Also review where your money is being invested. Most experts recommend investing in a diverse portfolio to limit your risk while still achieving attractive returns.

Freeze Your Credit

A credit freeze, also known as a security freeze, is one of the best ways to prevent fraud and identity theft. When your credit is frozen it limits access to your credit reports unless you lift the freeze, or “thaw” your credit. Limiting access to your credit report makes it significantly harder for creditors and lenders to access your files, this prevents criminals from opening accounts in your name.

In 2018 the Economic Growth, Regulatory Relief and Consumer Protection Act, was passed which requires all credit freezes to be free of charge. A credit freeze will not impact your credit score.

The three major credit bureaus are Equifax, Experian and Transunion. Freeze your credit at each bureau. This can be done online, by phone or through the mail.

You will need to provide your full name, address, Social Security number, birth date and other personal information. You’ll be asked a few questions to verify your identity and then be asked to create a PIN.

Keep your PIN and other information they provide in a secure location, you will need this to access your account and manage the freeze.

You can temporarily or permanently unfreeze your credit online, by phone or by mail.

Children are also vulnerable to identity theft see my article How To Freeze Your Childs Credit

Check your credit reports regularly. You can use sites like Credit Karma and Credit Sesame to view your credit scores.

You are entitled to a free copy of your credit reports at the three major credit bureaus, Equifax, Experian and Transunion. Go to AnnualCreditReport.com to request your reports.

If your current credit score is not up to par, consider taking steps to improve it. See my article How to Improve Your Credit Score