Happy New Year! Riding the wave of peace on earth and good will toward your bank accounts, here are three New Year’s Money Resolutions I would love to see people make and some ideas about how to keep them.
Right-size your emergency fund.
First, what is a reasonable goal to have in safe money?
Three to six months of expenses is a good guideline.
- If you have a partner who is also working and both jobs are steady, 3 months is a good goal.
- If you are single, work in an unstable income situation, or are newly self-employed, 6 months would be a nice buffer against low-or-no income months.
What if you have more than that in your savings account? Talk to your financial advisor (or mom or AI or the mailman) about opening a non-retirement brokerage account at a discount brokerage firm and invest those extra savings for growth. Keep in mind, there is risk of losses with mutual funds or other investments that have growth potential.
What if you have less than the desired safety net? Set an automatic transfer from your checking to savings each month until you get to the desired amount. Or, commit to using all “found money” (gifts, tax refunds, bonuses, tips) to get to your savings account goal.
Commit, already!
No, not to that guy/gal you met on New Year’s Eve. To a financial provider.
People are under the impression that having money spread around different investment companies is more diversified or more. Not true! It’s just more hassle.
For example, if you have 4 US Large Cap Stock mutual funds spread across accounts at Janus, T. Rowe Price, Morgan Stanley, and Edward Jones, you own mostly the same stocks, just with different bookkeepers.
It’s like buying chocolate ice cream at Baskin Robbins (do they still have those anymore?), Ben and Jerry’s, Haagen Daas, and Blue Bell stores and saying how sophisticated your ice cream choices are. PS, Blue Bell is the best, so just get that and be done.
Instead, open an account at a discount brokerage (i.e. Fidelity, Schwab, ETrade), and transfer as many accounts as you can into one spot to track your investments. Easier at tax time, easier to keep track of your true asset allocation, and easier for your heirs if an unfortunate accident should befall you.
Get Back Into The Market.
If you bailed out of the stock market due to worry about tariffs, AI, war, pestilence, or the mullet coming back into style, it’s time to admit you didn’t time it right and get back in.
This is not personal investment advice or some sort of market prognostication! Just a friendly reminder that getting out of the market and avoiding losses is one (often mistimed) part: Knowing when to get back in is the other, and the one most people miss. No one will call you to tell you when to get invested. You just need to do it.
If you are nervous, find a balanced portfolio or fund (like a Target Date 2030 fund) and use that for easy diversification.
And remember, you will be an investor for the rest of your life, so if you are 55, your time horizon is not 5-10 years until you retire. It’s 25-35 years until you expire.
Everyone has a long time horizon for most of their money. Even current retirees are not using all of their money at once for spending. Work with your financial advisor (or mom or AI or the mailman) to determine how much money needs to be safe for your personal spending needs and how much can be set aside for longer term growth.
I hope these ideas get you off to a prosperous start to 2026.
