“Am I in a better financial position than I
was last year?” This doesn’t mean “Am I making more money?” because most of us find
that as our income increases, our expenses do, too. What the question really means is “Am I making better, more-informed
financial decisions than I was last year?” If you can answer a hearty yes, then
hooray for you! However, the rest of us probably have room for some
improvement. What follows are “Financial New Year’s Resolutions” that you may be
able to use to improve your financial position. Don’t try to initiate them all
at once or you will be too overwhelmed to accomplish anything. Select one or
two that you can work on and build from there.
Resolution #1 - I hereby resolve to spend less than I receive
through earnings or other sources of income.
This is probably the most important resolution you can
make. Living within your means brings
peace of mind. It also saves all that
interest you may be paying. Many people find that using a budget to track their
spending helps them to keep their spending within limits. If you don’t have a budget,
make one!
In addition, if you aren’t carrying a large debt load, you
should be putting aside a small amount of money each pay period and gradually
working up to a larger amount. It is a good idea to work toward having 3-6
months’ living expenses in an accessible savings account. This will be a
cushion in case of medical emergencies, loss of job, etc. Remember that putting
money aside does not mean that you can put an equivalent amount on the credit
card if you run short! You’ll pay more
interest on your debt than you’ll receive on your savings (which is why you
should pay off high-interest debts before establishing a large savings
account).
Resolution #2 - I hereby resolve to decrease my debts and not
add to them any further.
Getting out of debt is probably the most popular
resolution next to weight loss. With the average American household carrying
thousands of dollars in just consumer debt, it’s no wonder that many are
seeking debt relief. Evaluate your financial situation and find “extra” money
that you can apply toward debts. For example, let’s say that every morning you
spend $2 on a beverage on your way to work.
That’s $10 a week or $520 a year that could be put to paying off debts.
Simple Joe even has a program that can show you the best way to eliminate your
debts so that it takes the least amount of time and you pay the least amount of
interest. Most importantly, vow to not add to your current debt load. Save up
for things you would like to buy!
Resolution #3 - I hereby resolve to increase my financial education
and apply it.
Learn more about your money and how to make it work for
you. Read books, articles, magazines,
etc.; attend seminars; investigate websites that teach you about money. Simple Joe’s
website offers links to several good books and articles to help you get going.
Several articles offer expanded advice on many of the topics discussed in this article.
Many books may be available at your local library. Start small - you can’t possibly assimilate everything in one go
around. Select one area of interest, such as budgeting or investing, and learn
all you can about it.
Resolution #4 - I hereby resolve to start a retirement account
if I don’t have one. If I do have one, I will put more money into it.
Check with your employment to see if they offer a 401k
plan and whether they match a percentage of your contributions. If they do match, that’s like free money to
you! Gradually work up to the maximum allowable contribution. If a 401k plan is
not available to you, then find out about IRAs or Roth IRAs. Your financial
institution can help you to understand the strengths and deficiencies of these
two retirement plans, as can many websites. The most important thing is to be
putting money aside for retirement. You don’t want to have to work through your
retirement years!
Resolution #5 - I hereby resolve to set up a will and
trust.
If you own anything at all or you have children, you need
to have both a will and a living revocable trust. Both of these help to express
your wishes and protect your assets upon your death. Don’t let that burden fall
to your children. Estate taxes alone
could eat up much if not all that is left after paying off your debts if your
estate is not properly protected. Locate a good attorney dealing with wills and
trusts to help you get going. Ask friends for references or call your local law
university to find out who teaches this area of law there and whether or not
he/she is in private practice as well. Expect to pay several hundred to several
thousand dollars, depending on how complicated your affairs are. This is one of
the few ways in which you can truly buy peace of mind.
Although there have been several ideas presented here,
there are many more resolutions you could make to help out your financial
position. The important thing is to pick something and get going. If it will
help, write out your resolution and put it where it can remind you several
times a day. Remember - if you’re
standing still, you’re not moving forward!
© Simple Joe, Inc.
Chemain Evans is a quality control specialist for Simple
Joe, Inc., makers of the popular Simple Joe’s Expense Tracker PC software.
Expense Tracker is a quick and simple way to keep track of your expenses and
stay within your budget. Expense Tracker (http://www.simplejoe.com/expensetracker/index2.htm)
is ideal for tracking personal, business, home and club expenses.
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MSBJ Holdings LLC's editorial objective is to provide our readers with a forum for personal suggestions, investment ideas, and health & fitness recommendations. Our articles should not be construed as specific advice for the reader, nor does any article imply an endorsement by MSBJ Holdings LLC. Your best course of action must be based on your individual situation.
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