With 2012 just around the corner, SavvyMoney.com, a comprehensive resource for information, education and “do-it-yourself” tools for people coping with personal debt, is providing tips to help consumers reach a better financial future in the New Year. Written by industry expert and author Jean Chatzky, Director of Education for SavvyMoney.com, these tips are geared to consumers looking to set realistic, achievable financial goals.
Chatzky’s five tips for getting financially fit in the New Year include:
1. Make a plan for the year. Determine your overarching goal and write it down, whether it is paying down debt, putting more in retirement savings, or paying for a vacation in cash. Then, set some benchmarks by breaking that goal down into manageable pieces. If you’d like to save $5,000 by the end of the year, recognize that that’s $400 a month, $100 a week. If you focus on that weekly amount, you’re more likely to get there. And in all cases, it will help to track your spending for the first month by saving your receipts and recording them regularly or using an online program. Once you do, it will be easier to cut back.
2. Automate – but pay attention. Most people benefit from a relatively hands off approach to their savings. Set it up so your employer pulls money out of every paycheck and deposits it in your 401(k), or allow your IRA provider to deduct a set amount from your checking account. That way, you don’t have to make the decision to save. But that’s where the automation should end. You need to look at those investments once in a while and see that you’re on track. Make part of this year’s resolution about rebalancing your investments, either right now or on your birthday.
3. Put a windfall to work. Right now through the first few months of the New Year are ripe for windfalls. You might receive an end-of-year bonus, raise, or a tax refund. The best thing you can do with this money is pretend you never received it. Funnel a bonus or tax refund directly into savings, without giving yourself a chance to spend it (if you’re carrying credit card debt, use this cash to pay it off or make a solid dent in your balance). When you get a raise, bump up your retirement contribution to match the increase in salary – research shows that otherwise, you’ll adjust spending to the new amount and hardly feel like you’re earning more.
4. Spend smart. Start the year with a bill audit. Look over every bill that comes in this month, paying particular attention to the ones you pay automatically with a draft from your bank account or bill pay through your bank. You’ll likely find you’re paying for things you don’t need or didn’t even know you had – extra cell phone minutes, HBO when your favorite show is in the off-season, an equipment protection program from your satellite TV provider. Call your insurance providers and see if they’re willing offer you a better rate. Then make a commitment to save money every day, by clipping coupons, shopping around for the best deals, using energy efficient light bulbs and making sure your doors and windows are sealed for winter to conserve electricity.
5. Earn more. If you’re truly not going overboard with the discretionary spending and you still can’t get ahead, you may not be earning enough money to support yourself. If you haven’t gotten a raise in a while, it’s okay to ask for one now, but approach the situation lightly in this still-shaky economy. Go to your boss’s office prepared with ammunition – lay out how you save (or earn) the company money and how much competitors are paying people in your position. If you work for yourself, the New Year is the perfect time to raise your rates slightly.
For more information, visit http://www.savvymoney.com.
This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.