13 Things You Can Do in 2010 to Stay Financially Fit

Tax Tips

The New Year has come and gone. It’s this time of the year that people create all kinds of New Year’s resolutions, one of the most popular being joining a gym (in fact gym memberships boom this time of the year). But what about your finances? How are you doing on those resolutions you made about three weeks ago now?

Shouldn’t you be working to be financially fit as well? Or, if you resolved to do so, what are you waiting for?

Here are 13 things you can do in 20 minutes to get financially fit in 2010:

1. Open Up A High-Yield Online Savings Account. Brick and mortar banks pay almost nothing these days. With most online savings accounts you can actually see your money growing and earning interest. This added incentive helps keep you going on your path to savings.

2. Re-Allocate Your Retirement Accounts. Check up on your IRAs and 401(k)s and any other accounts you may have to make sure you are sticking to an allocation plan. Many companies will let you set up an email alert when your accounts exceed a specified percentage and remind you to re-allocate your retirement plan. This helps you you retire well.

3. Up Your 401(k) Contributions to the Company Match. The company match is free money for your retirement. Really. Think your salary isn’t enough? Add the company match to it, it’ll look better. And your contributions are pre-tax which means if you are taxed at say, 25%, a $100 contribution really only costs you $75 in your paycheck.

4. Set Up an Automatic Savings Plan. Create a savings goal. Now divide that number by 12 months. Set up your online high-yield savings account (see item #1) to withdraw that amount every month. Voila! Automatic savings. Too often we say we are going to save but by the end of the month the money is spent. Make it automatic to make sure your savings happen. Don’t even give yourself a chance to get your hands on that pre-set amount, send it straight to savings.

5. Call Your Credit Card Company to Lower Your Interest Rate. How is your account? Have you been paying on time? Are you carrying a balance? If so, give your credit card company a call and ask to have your interest rate lowered. Most times they will oblige, especially if you tell them you have an offer for a better rate with another card. This could easily save you hundreds, if not thousands, on your credit card balance as well as help you pay it off sooner.

6. Contribute to An IRA. Try to contribute the maximum that you can. If done before April 15th you can still contribute for 2009. A Traditional IRA means you get tax breaks now. A Roth IRA gives you tax breaks when you retire. TAX BREAKS!

7. Donate Old Books and Clothes. Man, do our closets pile up with stuff we don’t use anymore. You too? Head to the local library and donate your old books. Ask for a receipt so the books can later be written off at tax time. Take your clothes to the Salvation Army or another charity. Get a receipt there too – donations are deductible.

8. Set Up A Bill/Pay Calendar. Late bill payments not only cost you cash but they can beat up your credit score too. Use a free application like Google Calendar to set up bill due date reminders for all of your bills. This can help you stay on top of your bills and can remind you if a bill got lost in the mail. Or, free budgeting software like Mint.com can send bill reminders for you, while also helping you easily set up budget, with alerts for when you overspend on clothes, food, or wherever you want to save money.

9. Use Tax Software (like TurboTax) for Your Taxes. When I started filing taxes I used to do them myself (ok, computers weren’t used as much either but that’s another issue). It would take my quite a while making sure I had every form and reading through all of the instructions then I started using tax software. Like butter! It was so much easier and quicker than doing my taxes on my own. Plus, you can save almost $200 by choosing tax software over an accountant.

10. Adjust Your W-4. Do you get a big tax refund every year? You know that’s a tax-free loan to the government right? And you could have that money in your paychecks instead? Adjust your W-4 withholding so your tax refund is less and you get more money in your paychecks now! Know what? You can put the difference in your online savings account (Item #1) as part of an automatic savings plan (Item #4).

11. Get Your Free Credit Report. You are allowed to get one copy of your credit report for free from each reporting agency once a year (three agencies). Mark your calendar in four month intervals and check one report each time to make sure all of the information on it is accurate. Mistakes on your credit report can cost you big time on your credit score, which can affect everything from loan rates to insurance costs to getting a job.

12. Collect Your Loose Change In A Jar. Toss your daily pocket change in a jar. When it fills up cash it in (look for a free service). You may find you saved up over $100 with very little work!

13. Make a List Before Food Shopping. Ever go food shopping with an idea for what you need then come home with $300 of groceries and still forgot stuff? I have. Write a list and keep to it. It will keep you focused on buying what you need and keep you from getting the extra. It also helps to cut down trips to the grocery store when you forget something and start the whole process of getting what you don’t need all over again.

There you have it – 13 things you can do in 20 minutes to get you financially fit in 2010.

What else can you think of?

Leave a Reply