Ditch weight loss, make finances your New Year's resolution

Posted at 4:11 PM, Jan 03, 2019
and last updated 2019-01-03 18:28:36-05

BALTIMORE — There's getting fit and then there's getting your finances in order. Both are popular New Year's resolutions and both require self-control, but unlike losing weight, it only takes a day to set yourself up for financial success.

Loyola University Maryland Sellinger School of Business accounting professor JP Krahel says to start by tallying up your debt then come up with a plan to get rid of it.

“Always go for the debts with the highest interest,” said Krahel.

According to the Experian State of Credit report, Americans owe an average of $6,354 in credit card debt. And in Maryland, the average balance is $7,043.

Paying the minimum every month can take years, so if you can't afford to pay more, look into balance transfer credit cards with interest-free periods.

Once your debt is manageable, set two savings goals: save for retirement and save for college tuition.

“I know I want to be able to sleep at night when I'm 40, and I want to know I made the right choices now, so saving for your retirement now is something that's going to pay dividends in actual cash, however, many years down the road. But in the meantime, it's also going to give you that piece of mind,” Krahel said.

And you don't need kids to start saving for their schooling. The state is offering incentives to those who open Maryland 529 accounts early.

Last year, they gave away $500 to lower and middle-income families, and the state is doing it again in 2019.

“So, these aren't romantic ways to save, but they're practical and they pay off in the long run,” said Krahel.

If you're hurting for some cash now, file your taxes.

“The quicker the IRS will get through your refund and the quicker you'll get it back. So, I'd rather wait one week in February than five weeks in April,” said Krahel.

Employers have until January 31 to postmark your W-2 form. If you don't receive it by mid-February, check with your employer. Tax day is April 15.

And remember, the shutdown may have an impact on how long the government takes to process your refund, so that's another reason why you'll want to file sooner than later.