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.
My 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 (now “Ally Invest“), because they offered 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 post on 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).
- 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?