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Is saving money part of your New Year’s resolution? Do you want to get your personal finances back on track this year?
I’ve listed 10 ways to take better care of your finances so that by the start of next year, you’ll be in a better financial position.
10. Bring your lunch to work and cook your dinners. When you start thinking about how much you spend on lunches and dinners when you go out to eat, it may amaze you. If you think about it $8 lunch + $12 dinner = $20/day. Multiply that by 260 (the number of weekdays in a year), it equals $5,200 a year. It certainly adds up. So even just bringing in one meal a day can save a substantial amount of money.
9. Get your free credit report. Everyone is entitled to 1 free credit report per year, so take advantage! First, this enables you to check for fraudulent credit cards which helps prevent identity theft. It also tells you your credit score, which will give you an idea of whether your credit is good or bad. If you’re paying all your bills on time, hopefully it should be a good score. You can get a free credit report from http://www.freecreditreport.com.
Take advantage of your free credit reports. See how to work the system to get 3 free credit reports each year.
8. Set aside spending money for the weekends. If you’re like me, most of the money I spend is spent on the weekends. In order to prevent overspending, I’ll make sure I set aside a percentage of my spending money just for the weekends. This way I (hopefully) won’t run out.
7. Review your insurance. Make sure that you have a term life insurance policy 10 times your annual salary. Additionally, you may be able to save money on higher deductible home and auto insurance plans. Check with your insurance agent to see if this would be appropriate for you.
6. Increase the percentage of your earnings going towards retirement. If your company matches any contributions to a 401K, ensure that you’re contributing at least as much as they will match. At that point, it may be a good idea to open a IRA/Roth IRA account and contribute the maximum allowable. If you have additional money to contribute, contribute the additional amount to your 401K. Increasing the amount you save for retirement will be beneficial in the long run!
Check out these retirement savings ideas!
5. If you’re planning on making a large purchase in 2008, save the amount needed and make the purchase with cash. It’s my opinion that people are reliant on financing to make large purchases. It will save you money on interest if you save in advance and purchase using cash. Additionally, using cash ensures that you are purchasing something that you can truly afford.
4. Save More! Sure it’s obvious, but how many of us actually take steps to ensure we really are saving more? I suggest creating an automatic withdrawal (from your paycheck or checking account) to go straight to your savings account. This puts money into savings without us ever having to see it in our checking account. Make sure you choose an amount that fits your budget – but just in case you get into a tight spot (which should rarely happen) you can transfer money back from savings to checking. Also, make sure have a rainy day fund that includes enough money to cover your bills & expenses for at least 6 months. It should be enough to cover you for 6 months in case of job loss, injury, etc.
Some tips for starting an emergency fund or rainy day fund.
3. Set up a college fund for your kids. With tuition getting more expensive every year, it’s very important to start saving early for higher education. Contribute what you can afford, but the more the merrier.
Is your child heading off to college? Here are some tips regarding student loans and other forms of financial aid.
2. Pay off (or at least pay down) your credit card debt. One of the most common financial problems is racking up credit card debt. Therefore I challenge everyone to pay off their credit card debt by the end of this year. Additionally, try to avoid paying for anything on a credit card that you can not pay off by the end of the month.
1. Budget, Budget, Budget! The best and easiest way to avoid spending and save more is to budget. Take an hour this weekend and look at your bills from the past couple months and come up with your total monthly expenses. Then allocate what you think you need for spending money (groceries, gas, etc.). The hardest part to budgeting is getting organized and creating it. Followed closely by sticking to it! So while we’re all in the New Years resolution mode, take some time to figure out your budget.
I’m a Financial Consultant and Personal Financial Representative with experience in financial analysis, strategic planning, presenting, & financial advisory services.