The start of a new year is a good opportunity for you to overhaul your life for the better and one excellent place to start is by making solid financial resolutions. It can help you to get closer to your money goals – whether it’s increasing your retirement savings or setting enough money aside for a down payment on a house.

As the New Year approaches, here are 3 moves you may want to consider adding to your New Year’s financial resolutions.

1. Pay Fewer Investment Fees

Fees can be a major detractor from your wealth-building efforts, shrinking your investment earnings over time. Take mutual funds, for example. The fees for mutual funds can add up — whether that’s a transaction fee when you buy or sell – which is often referred to as a load – and annual fees that are paid on an ongoing basis.

Moving toward the New Year, you have two options for limiting what you’re paying out in fees. The first is to rethink your investment choices. For example, if you’re heavily invested in actively managed mutual funds, you may be able to trim some of the fee fat by opting for passively managed exchange-traded funds (ETFs) or index funds instead.

If you’ve already chosen relatively low-cost funds, but high advisory fees are eating into your earnings, it may be time to think about changing financial advisors. When vetting potential replacement candidates, review the fee structure, their services, and their professional credentials carefully so you understand what they have to offer and what it’s going to cost.

2. Expand Your Portfolio

Diversification is important for insulating your investments against volatility in the market. If your investments are concentrated primarily in one particular asset class, you’re putting the rest of your portfolio at risk if that market sector experiences a downturn. If your investments lack variety, injecting some new blood into your holdings should be on your to-do list.

Real estate, for example, can be a good hedge against fluctuations in the market. If you’re not investing in real estate yet, this could be a great time to consider adding a rental property to your portfolio, since rental rates are expected to rise. As an alternative, investing in a real estate investment trust (REIT) or venturing into real estate crowdfunding could allow you to reap the benefits of owning real estate without actually having to purchase a property.

3. Become a Regular Rebalancer

Periodically rebalancing your portfolio helps to ensure that you’re maintaining the right asset allocation to meet your investment goals. The trouble is that all too often investors fail to take a hands-on role in managing their investments, preferring a set-it-and-forget-it approach.

If you haven’t paid much attention to rebalancing in the past, the New Year is an opportunity to change things up. For example, if you normally rebalance once a year, think about increasing that to biannually or quarterly. While you don’t need to review your asset allocation daily (therein lies madness – and the risk of overreacting to minor market changes), you should be keeping a finger on the pulse of what’s happening with your investments.

The Bottom Line

These resolutions can be useful if you’re ready to press the reset button on your investment strategy for the New Year. However, the hardest part about making resolutions is sticking to them. To make sure you stay on track, consider how they fit into your larger financial plan.

Source: Investopedia