Lunar New Year Financial Resolutions

By Michael C. Tow

In my last article, I wrote about ways to keep your New Year’s financial resolutions. But unfortunately, three weeks or so into the New Year, many of you have probably already broken them. Well, Happy Lunar New Year! Here is your second chance to make and stick with some new New Year’s Resolutions.

Here are my top 5 Financial Resolutions for the Lunar New Year:

1. Do a Net Worth Statement. Before you know where you are going, you need to know where you are at. A Net Worth or Balance sheet statement will tell you the difference between what you own and what you owe. What your statement reveals is how much of your hard earned income you are able to keep. It confirms the thought that it doesn’t really matter how much money you make, but rather what you do with your money and how much of it you are able to save.

2. Create a budget. Everyone of you in one way or another has created a budget at one point in your lives, however I bet that only a very small portion of you have created a budget that was effective. To create a budget that you have a realistic chance of keeping for the long term, you must first figure out where you are spending your money. Once you have everything tracked, observe your spending patterns and then work out a realistic budget that you can keep for the long term. Being realistic is the key. Just like a food diet, there is no point starving yourself on rice cakes and carrot sticks just to inevitably break it by binging on desserts and candy three weeks later.

3. Make sure you have adequate life insurance. This is especially important for those of you who have young children or a spouse or a person that depends on you for financial help. Ask yourself this question: If you were to die today, would there be enough money for those who depend on you to survive? Term insurance can be inexpensive and can cover for premature death.

4. Get out of debt. I’m not talking about mortgage debt or your car loans, but I’m talking about your credit card debt. With credit card interest rates around 15% and money market fund and saving account rates are near 1%, it doesn’t take a rocket scientist to realize that keeping a savings while having credit card debt doesn’t make sense. If you have trouble cutting your debt, take a look again at New Year’s resolution number 2.

5. Build an emergency fund. Make sure that you have an emergency fund that covers at least six months of living expenses. This emergency fund should be in a separate account that is not part of your day-to-day checking and savings account. I usually recommend an account without an ATM access, to make it not as easy to withdraw money in non emergency situations. An emergency fund like the name says is for emergencies!
Happy Year of the Dragon !


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CERTIFIED FINANCIAL PLANNER ™ Michael Tow is President of New Boston Financial. He is a registered representative of, and offers securities and advisory services through Commonwealth Financial Network- a member firm of FINRA/SIPC and a Registered Investment Adviser. Fixed insurance products and services offered by New Boston Financial are separated and unrelated to Commonwealth. He is located at 58 Harvard Street in Brookline and can be reached at 617-734-4400 or


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