Finances Fall By the Wayside in New Year's Resolutions

By Lifestyle and BudgetFOXBusiness

Americans will focus on health before finances in the New Year according to the 7th annual New Year’s Resolution Survey from Allianz Life Insurance Company of North America. The majority 44% of respondents reported their top focus for 2016 will be on health/wellness, with financial stability trailing at 29%.

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Katie Libbe, Vice President of Consumer Insights for Allianz Life Insurance Company of North America, talked to to review the following tips from the survey.

Boomer:  According to the survey, health and wellness topped the list of resolutions ahead of finances. Why do you think people tend to focus on fitness instead of managing their money?

Libbe:  Analyzing personal finances is often a scary process; so many people do their best to avoid it at all costs. It’s much easier to start a new diet or join a gym than it is to take a long, hard look at your bank account and determine if you’re taking the right steps to ensure a successful financial future. Although getting in shape is certainly a worthy goal, financial fitness should also be a high priority – and keep in mind that financial stability helps improve wellness overall.

Boomer:  What can boomers do to conquer their bad financial habits in 2016?

Libbe:  The best way to address any type of bad habit is to recognize you are guilty of that behavior and make a detailed plan to change for the better.  With finances, it is often difficult to completely turn over a new leaf, so a smart idea is to start small and build toward achieving the larger goal. For example, 29% of respondents in our survey said their worst financial bad habit was spending too much money on things they don’t need. While it’s probably not possible to completely cut out all unneeded spending, by analyzing monthly expenses, you can get a much better idea of the little things you can do without. This, in turn, can lead to a better overall savings plan – which can go toward managing regular expenses or addressing longer-term goals, including retirement. An important first step in this process is to begin a savings program, no matter how small the amount. By getting into the regular habit of saving money from every paycheck and "paying yourself first," you can see tangible proof of your efforts over time and get the motivation to keep working toward your savings goals.

Boomer:  What are a few appropriate actions boomers can make to better secure their financial futures in the New Year?

Libbe:  With boomers either on the cusp of, or already in retirement, they need to think about the next stage in their lives – one that could last 20-30 years or more. This means they should plan beyond asset accumulation and spend some time addressing the challenging topic of retirement income – i.e., how they can ensure their money lasts as long as they do. Two appropriate actions to help with this process are seeking the help of a financial professional and also incorporating financial products that offer guarantees. Financial planning can be incredibly complex, so it can be useful to connect with a professional that understands the entire financial landscape facing boomers – from asset accumulation and retirement income, to tax strategies and optimizing Social Security.

Boomer:  Nearly one in three respondents didn’t include financial planning in their resolutions.  What tips would you give to those that think they don’t make enough money to worry about it?

Libbe:  Unfortunately, the idea that people don’t have enough money to engage in financial planning is something we continue to hear year after year. It’s a myth that needs to be debunked because too many people are missing out on a crucial opportunity to get their finances in better shape for the future. It’s important to remember that financial planning can take many forms – from being a more formal process where you work with a financial professional to review finances and set specific goals, to simple budgeting that can help eliminate unnecessary expenditures and identify funds that can go to savings. The key is to start somewhere, set manageable goals, and establish a few steps to help you get there. Regardless of your salary, it’s a good idea to engage in some form of financial planning on a yearly basis and take a strategic approach to spending and saving.

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