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Personal finance

Easy New Year's money resolutions that you won't break

Russ Wiles
The Arizona Republic

Now's the time of year when people will start plotting their resolutions for 2017 -- even though many know in the back of their mind's that they will be discarded in a month or so.

There are a bunch of low-hanging-fruit resolutions that can be achieved in a matter of hours, if not less, that can improve your financial situation.

But there are a bunch of easy, no-brainer resolutions that can be achieved in a matter of hours, if not less, that can improve your financial situation. Here are some:

•Save more, without budgeting. A November survey by New York Life found 61% of the 1,000 people surveyed say they plan to save. The logical way to come up with a savings plan involves drawing up a budget that tracks your spending patterns over the course of the past year so you can see how much you can afford to save. But if you're not willing to make the budgeting effort — and many people aren't — try increasing your saving by, say, one or two percentage points. If you have online account access, it's quick and easy to boost your deferral rate in a workplace 401(k)-style plan, without doing any budgeting. After a few weeks, there's a good chance you'll get used to the lower take-home pay. If not, you can make adjustments.

People vowing to save more for retirement generally view a hike of one percentage point as an achievable goal, according to a financial-resolutions survey by Fidelity Investments.

•Pay off debt, one account at a time: An even higher percentage of respondents in the New York Life poll, 67%, said they're focused on reducing debt next year. Assuming you have multiple types of accounts — credit cards, auto loans and more — the task can seem overwhelming. Mike Sullivan, a personal-finance consultant at Take Charge America, a Phoenix credit-counseling group, suggests first paying down the loan with the highest interest rate, then moving down the list. Focusing on one account at a time not only can save time but also provide a sense of accomplishment as balances get paid off. To achieve any debt reduction on credit cards, you will need to pay more than the minimum monthly amount due while avoiding a lot of new charges, Fidelity notes.

•Check your credit reports.  You can receive three free reports over the course of a year through annualcreditreport.com — one each from credit bureaus Experian, Equifax and TransUnion. You don't need to access your reports all at once and probably shouldn't. A better strategy is to pull one every four months or so, so that you can get a snapshot of your loan balances, bill delinquencies and more at various points over the course of a year. If you find an error or omission that needs to be contested, doing so can take some time

•Rebalance your investments. If you hold a diversified portfolio of stocks, bonds and mutual funds, it's smart to assess whether your mix has moved out of alignment. That tends to happens during years like 2016, when the stock market has generated much better results than the bond arena. Rebalancing means taking some profits from your winners and deploying the cash into laggards. You don't want to rebalance too much, especially if you would incur fees or taxable gains along the way, but it's something to evaluate at least once a year or so. If you have electronic access to your accounts, it shouldn't take more than a few minutes.

•Check fees: It's smart to review how much you pay in various financial expenses — everything from ATM charges and credit-card interest to IRA custodial fees and stock-brokerage commissions. Year-end account statements usually provide summaries, making this information easy to obtain. The typical household pays about $43 each month in credit card and bank fees, according to Fidelity, citing a study by researchers at the University of California, Davis and Dartmouth College.

Reach the reporter at russ.wiles@arizonarepublic.com or 602-444-8616.

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