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Home » Lifestyle Finance, Personal Motivation

2010 Financial Resolution Guide: 10 Choices – A La Carte Style

Last updated by on 9 Comments

Looking for Financial Resolutions that you can Actually Stick to this Year?

If anyone knows how hard it is to stick to resolutions, it’s me. If I had a dollar for every time that I vowed that I was going to… stop talking about how real Sasquatch is, or… stop farting in the company of my dog and blaming it on him – then I’d be rich.

Giving a one-size-fits-all personal finance resolution list is incredibly unrealistic, and just downright arrogant. That’s why I wanted to provide a list of 10 financial landmarks that you can set out to achieve in 2010 to enhance your financial well being and build a good foundation for the future.

financial resolutionsMy challenge to you is to pick 3 of the 10 to focus on in 2010 and share what they are in the comments. Cross more than three off the list? You’re an all star. Have all of these crossed off your list already? Then what is next for you? Share with us!

1. Start up an IRA

An IRA is ESSENTIAL to any retirement strategy. If you don’t have one, what are you waiting for? It wouldn’t be a bad idea to have both a traditional and a Roth IRA either, to give you options come tax time.

I recently moved my IRA from ETrade to TradeKing, because Tradeking offers zero inactivity fees, zero annual fees, they get consistently good reviews, and trades are only $4.95. It might be a good place to start. Also, check out my recent post on 2010 maximum IRA contributions for some pointers on IRA limits and deadlines.

2. Create a Budget – and Stick to it

This should really be step one for everyone. And I’m not just talking about looking at your Mint income and expenses and if you’re in the black, calling it good.  True planning requires you to know every source of recurring expenses and income and then planning for the larger one-off expenses. Here’s a free budget planning worksheet that I created and use to get you jump started.

3. Rollover Old 401K Monies Into your IRA

If you have old 401(k)’s from previous employers just sitting around, they may be doing nothing but collecting high maintenance fees. Consolidation of your retirement accounts can be extremely motivating and save you money in the long run. Not to mention, it can be extremely difficult to get an overview of your diversification across a large number of retirement accounts.

4. Downgrade your Vehicle

My decision to sell my vehicle and start taking public transportation was one of the best decisions that I ever made financially. If you are able to go that far, I’d highly recommend it. I estimate that I was able to save, at a minimum, $3,500 annually.

At the same time, I reduced my total carbon footprint by 1.3 tons (10%) annually. If public transportation is not an option, and you are making payments on a vehicle, consider downgrading to save extreme cash in 2010.

5. Get your Full Employer’s 401(k) Match

Whether your employer is willing to match 2 or 100% of your 401(k) contributions, its crazy not to take advantage of the match, if you have the money available to contribute. Check with your employer to see how you can maximize their match.

6. Save a Year’s Worth of Living Expenses in your Emergency Savings

It may sound like a bit much, but if you are able to do it, it can be a life saver. With my wife being laid off for 3 months in 2009, I don’t know what we would have done had we been living paycheck-to-paycheck. Here are some tips on getting your emergency savings ramped up.

7. Eliminate all Bad Debt

Virtually all debt outside of student loans and mortgages could rightly be considered ‘bad debt’. Make 2010 the year that you will pay it off and begin a new financial chapter in your life.

8. Clean up your Credit History

Annualcreditreport.com (a govt. mandated site) offers you three free credit reports annually from each of the three major credit monitoring companies – Equifax, TransUnion, and Experian. Space them out 4 months apart to stay on top of any major changes. Close down all accounts that you have no intention of using again and dispute any discrepancies or strange items that you cannot explain.

Watch out for credit score upsells, and by all means, stay away from less reputable sites such as freecreditreport.com.

9. Cut your Utility Bills

With a combination of simply asking and doing a little research, you can cut your bills significantly. In 2009, I was able to cut my phone bill in half with Ooma (for a savings of $30/mo.), and cut my Comcast bill by 33% (for a savings of $43) without losing any service! That’s $73/mo. in savings, or $876 annually!

10. Plan your Meals at Least a Week in Advance

May sound kind of ridiculous, but planning out your meals ahead of times ensures that when you go grocery shopping, you purchase everything you need. This cuts down on impulse food spending from eating out or worrying about where you’re going to find your next meal. It also eliminates the stress of not having your next meal around (we’re hunters by nature, after all).

Financial Resolutions:

  • Which 3 of the 10 would you pick to focus on? Why?
  • Have all of these crossed off your list already? Then what is next for you? Share with us!
  • What are your financial goals for 2010?

About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


9 Comments »
  • Alex says:

    My Financial resolution will be to cut down on my food. We don’t eat at restaurants but still spend a small fortune on food each week.
    I think we could easily cut back on our food volume thus reducing our expenditure. It could save us at the very least $20 a week or over $1,000 a year.
    In addition a reduction of alcohol consumption could put even more money into our savings account. One dink less a day will put another $500 a year into our savings.

    I am definitely not talking about dieting or giving up drinking, just doing both in moderation.

  • Brian says:

    IRA’s seem to be a very popular suggestion on these personal finance blogs. I am 25. I have a 401(k) that gets a company match of 6% so I contribute enough to get the match. Every penny of savings after that goes into my online savings account. I understand that contributing to an IRA is a way to force you to save for retirement, but if I’m already saving on my own, why save in an IRA over an online savings?

  • Julie says:

    G.E. I’d love to know why I should start an IRA. I contribute 25% of my income to my Roth and Traditional 401(k) from my employer. They match the first 6% and that’s the amount I contribute to the traditional. I also do plenty of my own savings, but not for retirement, I’m saving for a home. So…what would be the benefit for me to have an IRA?

  • Julie says:

    Oh, and to answer your questions. I’ve already accomplished some of these goals, but I’m still working on #10 and #2. I have my mint budgets set up, but I’m not sure how much help they are for me because I don’t really save more or less having them there. It’s more just for seeing where my money is going, in that nifty little pie chart, than actually reducing my spending. I obviously need to reduce my food expenses, because that’s always where about 50% of my budget goes.

  • Zach says:

    I’m happy to say that I have accomplished most of these resolutions, though there are some that don’t apply to me, and there are two that I definitely need to get done in 2010. First, I plan on starting a Roth IRA this year. And second, I would like to get that year’s worth of expenses saved. I think both of these goals are very achievable in 2010.

    Brian, the benefit of an IRA, and especially a Roth IRA, over a traditional savings account is that the IRA allows you to invest your savings in the stock market rather than just earning a bank interest rate, which in many years won’t even keep pace with inflation. Also, if your concern is needing access to that money before retirement, then remember that with a Roth IRA you can actually withdraw your contributed funds (but not the gains they have made) from the account after only five years. This is a huge benefit of the Roth for those of us who may be saving for a home or some other large investment but in the meantime want to generate a decent return on our saved funds.

  • G.E. Miller says:

    @ Alex – yeah, food is huge. I do most of my shopping at Trader Joe’s and it saves me so much money, vs. some of the big box alternatives.

    @ Brian – what Zach said.

    @ Julie – One of the biggest reasons is flexibility around tax time. For instance, if I know that I’m going to have to pay a penalty for underpaying my taxes during the year, I could get an instant $5K deduction from my taxable income by contributing to my traditional IRA. If I have the extra money available, I can’t just dump $5K into my 401(k) as most employers set a limit per payroll and the lag time before my contribution % goes into effect.

    @ Zach – keep up the good work.

  • youngandthrifty says:

    hey, great post!

    I personally did number 9 last year, I cut my cell phone bill in half through negotiation with my wireless provider. I probably will have to increase it though, next year, because I want an iPhone and Ill have to add more $$$ for the data.

    Number 10 is a gooood idea! There were so many days in 2009 where I was too tired from work and was too lazy to go buy groceries and said to myself “screw it, i’m gonna eat out”. So if i follow number 10 i’ll save money and frustration. two birds with one stone!

    Number 6 is a good idea too. Though it might be hard to set up initially (so many things to save for!) but given the economic situation right now, it’s very prudent.

  • Dub says:

    I definitely need to work on #10, and agree w/ Alex on cutting back on alcohol. My resolution this year is to know exactly where all of my money is going. I budget each month and save 25% of my income, but realized this year that I still spent about $2500 that I could not explain : (

  • Another Julie says:

    Julie’s question & G.E.’s response intrigued me:
    Just wanted to add a comment:

    For Traditional IRA, the phase out begins at $53,000 and ends at $63,000 for single filers, and from $85,000 to $105,000 for married filing jointly. Please note that you can still contribute to a Traditional IRA if your MAGI is above the phase out limits; however, you will NOT be able to deduct your contributions for tax purpose.

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