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Dec 26, 2019

Usher in 2020 with Stash’s Financial Checklist

By Stash Team

Use this to-do list to help get your financial priorities straight in the new year.

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There’s no better feeling than crossing items off of a checklist.

And now that 2020 is underway, we’ve created a financial checklist to help you get organized for the year ahead. Consider these eight tips for putting your financial house in order. And make sure you check these to-dos off your list as you get them done.

#1 Create a Budget

If you haven’t already, consider creating a budget for 2020. Budgeting can help you manage monthly expenses and save for both short-term and long-term goals. Budgets can also be a great way to align your values and spending, by helping you become responsible about your finances while avoiding unnecessary debt.

Whether it’s the 50-30-20  budget or the envelope method, there are lots of different budgets you can use. The most important thing is to choose one that suits you and your life. To get started, determine your income, tally up your expenses, and track your spending by combing through your receipts or looking at your bank statements. Decide what your short-term and long-term financial goals are. Make sure to include saving for short-term purposes and for retirement. Then you’ll be ready to create your budget.

Consider using the 50-30-20 budget, which segments your budget into three sections. Fifty percent of your income goes toward necessities or fixed expenses, 30% goes toward flexible or variable expenses such as entertainment, and 20% goes toward savings and investing.

#2 Automate Your Savings

You can make saving easier by automating it. If you haven’t turned on Auto-Stash yet, get started.

With Auto-Stash, Stash helps you schedule how much money you want to save toward your investments, including retirement. You choose how much you want to save and how often. Your money will move seamlessly from your external checking account to your Stash accounts, so you can invest on a schedule you decide, no sweat required.

Auto-Stash can help take the weight off your shoulders by putting your savings on autopilot—it can help you invest your money, and you won’t have to lift a finger.

#3 Create a Rainy Day Fund and an Emergency Fund

No one wants to start the new year by thinking about unexpected costs and expenses, but it’s important to be prepared for unplanned needs by creating a rainy day fund and an emergency fund.

Your rainy day fund should contain $500 to $1,000. This will let you pay for things without having to throw smaller expenses on your credit card, or take out a payday loan.

Your emergency fund should have enough money to cover your expenses for three to six months. You’ll use this money in the event of a more serious setback, such as a layoff or an illness that prevents you from working.

You can set aside money for your emergency and rainy day funds with Cushions on Stash1.

#4 Fund Your Retirement Accounts2

With the arrival of the new year, you’re another year closer to retirement. Remember that putting money away regularly for retirement, even if it’s a small amount at first, can really pay off over time.

Check out Stash’s retirement calculator, which can help you determine how much you might need to save each month to reach your retirement goals.

If you don’t have an employee-sponsored 401(k) plan through work, Stash Retire allows you to sign up for either a traditional or Roth Individual Retirement Account (IRA), which will let you put up to $6,000 away annually, and an additional $1,000 if you are age 50 or older. You can contribute to both an IRA and a 401(k), as long as you don’t go beyond the contribution limits for both during the calendar year.

#5 Invest Small Amounts Regularly

Make investing a regular part of your financial life in 2020. After you’ve set aside savings for an emergency fund, consider investing in the market, and making regular investments a part of your savings plan. Even if you take small amounts and invest them every week or every month, that can add up through the power of compounding.

If you haven’t started investing with Stash yet, get started with as little as $5. Consider using Auto-Stash to automate regular investing.

#6 Diversify Your Investments

As you start to invest regularly, keep in mind that diversification is part of the Stash Way. Diversification means you’re not putting all of your eggs in one basket, so you can better weather the stock market’s ups and downs. That means you won’t put all of your money in too few stocks, bonds, or funds.

When you’ve diversified your portfolio, it will hold a variety of investments that are not all subject to the same market risks, including stocks, bonds, and cash, as well as mutual funds and exchange-traded funds (ETFs). It also means investing in a variety of geographic regions in addition to the U.S.

Check out the Portfolio Builder which can help you build a diverse portfolio that follows the Stash Way.

#7 Pay Down Your Debt

When you’re building your 2020 budget, make sure to account for paying down any debt you have. Two strategies you might want to consider for paying down debt are the snowball method and the avalanche method.

The snowball method is designed to give you confidence by paying off small debts first. Use as much of your monthly income as you can to pay off the smallest loans first, since it will be the easiest to pay off quickly. You will also continue making the minimum payments each month on the other loans. Once you pay off your smallest debt, you move on to the next largest debt, and so until all of your debts are paid off.

The avalanche method is almost the opposite of the snowball method. You’ll start by paying off the debt that charges the highest interest rate first. The logic behind the avalanche method of paying off debt is that higher interest costs you more money the longer you hold it. So, by paying off the higher interest rate debt, you’ll be saving yourself money in the long run.

#8 Protect Yourself and Your Loved Ones3

This year, consider your loved ones and the best way to take care of them if something happens to you.

Life insurance policies can be an important part of a financial plan, helping to provide protection for the people who depend on you the most. Term life insurance can provide a financial cushion if something unexpected happens to you in the next two, ten, or even 20 years. It can help with things like living expenses, mortgage payments, even funeral costs. It can also help your family continue saving for your children’s education, or the dream house you planned to buy.

Kick off the new year and check out a term life insurance policy from our friends at Bestow.

So, begin 2020 armed with Stash’s financial checklist and our budget template. It can help you start the year off right!

Cheers to 2020!

Ring in the new year right by referring a friend.
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Written by

Stash Team

1Money in a Spending Cushion must be moved to the available balance in your bank account before it can be used and does not earn interest.
2 Nothing in this article should be construed as tax advice, and is for educational and information purposes only. Stash does not monitor whether a customer is eligible for a particular type of IRA, or a tax deduction, or if a reduced contribution limit applies to a customer. These are based on a customer’s individual circumstances. You should consult with a tax advisor for additional questions.
3Stash may receive compensation from business partners in connection with certain promotions in which Stash refers clients to such partners for the purchase of non-investment consumer products or services. This type of marketing partnership gives Stash an incentive to refer clients to business partners instead of to businesses that are not partners of Stash. This conflict of interest affects the ability of Stash to provide clients with unbiased, objective promotions concerning the products and services of its business partners. This could mean that the products and/or services of other businesses, that do not compensate Stash, may be more appropriate for a client than the products and/or services of Stash’s business partners. Clients are, however, not required to purchase the products and services Stash promotes.
Bestow life insurance is not available to residents of New York.

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