So, it’s been 2011 for a week. How are your resolutions going? Too many people start the year making resolutions and then fail to reach them. Many times the culprit is vague goals with no actual step by step by plan to follow through. It doesn’t have to be this way with your finances. If you’re looking to spruce up your money habits, here are 11 specific things you can do, starting today.
Look at the list and see which ones appeal to you. Focus on completing one before you move on to another task. It’ll increase your chances of keeping your financial goals.
- Catch up on your bills. Before you can make progress on your finances, make sure you’re all caught up on your bills.
- Start an emergency fund. Get your family on more solid ground, by having 3-6 months of expenses tucked away in the emergency fund. The easiest way to get start is to set up an automatic transfer from your checking account into your savings account. While getting a good interest rate is fine, it’s not the main priority – you want it in an account that you have easy access to when you need it.
- Hide your credit cards. If you’re having a hard time with your credit card debt, then do yourself a favor and keep them out of your wallet. The temptation of using plastic to buy stuff and put you further into debt is difficult for some. You may surprise yourself with how much money you saved in your first month.
- Negotiate and lower the interest rates. Don’t settle for what your credit card companies are charging you, see if you can lower your interest rates. If you’ve received offers for lower rates, mention that to the customer service representative. Don’t be rude or threatening, but be firm and polite. I’ve managed to lower my interest rates using this method.
- Tackle your debt with a snowball strategy. Now that you’ve managed to go ahead and get some better rates on your cards, you can have more of your payments go towards paying down the principal. First choose your smallest balance credit card and pay the most you can on it while paying the minimum on the rest. After you pay that card off, move that money into your next credit card and repeat the process. Even if you don’t pay all of your debts off in 2011, you’ll knock some of them out, giving you some peace of mind.
- Create a realistic budget. Be honest- when’s the last time you’ve stuck to your budget? For many, it’s been a while and a big culprit is an unrealistic budget. For most people, you have to include some buffer with your estimates. If you’re having a hard time keeping track, use free tools like Mint to help you see spending trends and create budget reminders.
- Start or increase your retirement contributions. Now is the time to get start if you haven’t already. The earlier you start investing for retirement, the more compound interest is on your side.
- Plan a debt-free vacation. Everyone needs a break and taking a vacation can be the way to go, just make sure you don’t into debt for it. It’s January so you have plenty of time to save up for a summer or fall trip without breaking your budget. Set aside a small amount each month to go towards your vacation fund. As deals pop up, take advantage of them and prepay for it.
- Negotiate a raise at work. You got the talent and you’ve helped your company weather the financial storm. Make sure you get the recognition you deserve by presenting a case for your next raise. Be well prepared and include numbers, showing how valuable you are. You may surprise yourself with the results.
- Clean out your clutter and make some cash. If you’re in dire need of spring cleaning, do yourself a favor and see if you can boost your savings by selling your old stuff. Take advantage of Craigslist and eBay or go ahead and have a garage sale. You’ll have more space at home and more money in your wallet. If you don’t have time to sell your old stuff, consider donating it to charity for a bigger write-off on your tax return next year.
- Get your taxes done right. Filing your taxes is not the time to fumble around. Having your taxes filed correctly can relive stress, reduce your tax burden, and in some cases increase your tax refund. It might sound a bit self-serving on this blog, but TurboTax makes it easy and guides you through the process of getting those taxes done on time.
Thoughts on Finances in 2011
Those are just some ideas I’ve had for this year, what are yours? What are you doing to get your finances in order this year? What success have you had so far?