The 4 Worst January Money Moves

money moves

Now that it’s 2015, it’s time to prepare for the challenges of the next 12 months. Hopefully, you’ve already started this annual financial checkup to get yourself ready for the new year. (If not, go and do it now, then come back here. We’ll wait, it shouldn’t take more than an hour.)

But there are things you can do this January that can set you back financially. Mistakes happen, but when mistakes are this easy to avoid, you might as well set fire to a pile of your money.

We’ve compiled four of the worst January money moves you can make, and we tell you how to make sure you don’t fall in their traps. Whether you’re just starting to fix your finances or are already well on your way towards saving, make sure you get closer to your financial goals and avoid these 4 money mistakes in the new year:

1. Using the same budget as last year.

A new year means new expenses, especially if you’ve got big life changes hovering over the horizon, like a new job, new responsibilities, and new goals. Before things get going in 2015, take a while to review your 2014 spending, see how you can adjust it to enjoy a financially healthy 2015, and find ways to make your budget so that it helps your financial goals, whether they’re short-term or long-term. Don’t have a budget? Find one that will work for you.

2. Blindly buying last year’s stock winners.

Just because a stock did really well in 2014, doesn’t mean it’ll do well in 2015. “If you’re just buying stocks because they’re popular, you’re going to get your head handed to you,” says Alan Skrainka, chief investment officer at Cornerstone Wealth Management, in an interview with USA Today. Especially in this volatile market, past performance is not indicative of future returns. Whether you’re a beginning investor or an old pro, don’t just keep buying the same stocks — diversify.

3. Not making an extra mortgage payment with your holiday bonus.

Do you have some money left over from your Christmas bonus after the season’s over? If you’re not funnelling that into one extra mortgage payment, you’re making a bad money move. Just one extra mortgage payment every January means that you’re chipping away at your principal at a faster rate. This could shave years off your mortgage, saving you thousands upon thousands in interest in the long run.

4. Leaving your online accounts vulnerable to attacks.

This isn’t strictly a money move, but it’s still important for your security. With all the hacking controversies from 2014, you’d be a fool to leave yourself vulnerable to risks this coming year. So new year, new passwords! If you do online banking, make sure to choose strong passwords that are memorable to you — Password12345 isn’t going to cut it. You should change your ATM PINs as well. Make updating your passwords and PINs a regular thing, perhaps every six months, and don’t use the same password for different sites. Leaving yourself open to attacks would be a terrible way to start off 2015. Read this article to learn more about how to minimize the risks and protect yourself online.

Need more tips on how to manage your money? We’ve got the articles you need right here.

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