For many of us it starts with new resolutions.
We give ourselves a bunch of promises like: I am going to lose weight and eat healthier… I am going to save money… etc.
But how often do we actually keep those promises and for how long?
Our new year’s resolutions regarding personal finance as well as our health should be of a high priority to us.
If you really want to make some important financial resolutions, I would suggest putting them in writing with the steps on how to accomplish them with specific deadlines.
Once you sat down, thought through the process and put it in writing, set up a monthly automatic reminder for yourself to check on the results of your monthly financial progress.
This way you are more likely to stick with your new year’s resolutions.
Here is a list of 5 crucial steps to follow on the way to financial success:
1) Get Out of the Red
Main priority – Get Out of Debt!
First make a plan to pay off smaller balances on credit cards and installment loans which will give you motivation to pay off the bigger balances as well.
Eliminate usage of credit cards to cut on costly interest payments.
Set up a goal to pay off all non-mortgage debt.
2) Start Budgeting
Successful personal finance is impossible without budgeting.
There are a lot of books and articles written on budgeting, but the bottom line is:
1) Add up your income
2) Estimate your expenses
3) Figure out the difference
3 main budgeting tips:
1) spend less than you make
2) set up percentage of your income that goes to your savings: from 10 to 35%
3) do not use your credit unless purchasing a home or a car
3. Start an Emergency Fund
We all need one for a rainy day.
Don’t ever think it will never happen to you: you too can lose your job, start having health problems or get into a car accident.
Set up a separate money market or savings account and put as little as $50 a month up to a $1,000 a month until you reach a goal of saving 12 month worth of expenses.
Then move funds to a Certificate of Deposit with a higher interest rate and keep it untouchable for a rainy day.
Having a life emergency fund will help you sleep better at night.
4. Bulk up on Retirement Savings Now
No matter how old you are, start contributing to your 401k.
Take full advantage of employer matching dollars – it’s free money.
Your 401k contribution is tax-deferred as well as investment earnings.
If you don’t have 401k at work or you are self employed, start your own Retirement IRA account with as little as $ 2,000 utilizing websites like TD Ameritrade, Scottrade, etc. that have all online tools for successful investing.
I, personally, have a Retirement IRA account with TDAmeritrade for the past 6 years, and I am very happy with their service.
5. Take Control of Your Personal Finance
If you don’t learn to manage your own money, someone else will fill find ways to manage or mismanage it for you.
1) Learn financial self-control
2) Always know where your money goes
3) Take full responsibility for your financial future and understand money basics: read a few books on personal finance, do your own price and rates research and make small manageable changes in everyday expenses.
Make an executive decision to make your money work for you now.
Having all this personal finance knowledge will make your financial life a tremendous success in 2012.
What are your budgeting, investing or money saving tips for the upcoming year?
Personal Finance Articles:
- Five No-Brainer Ways to Make Money
- Three Simple Steps to Reinvent Your Career
- How to Manage Investment Risks
- Should I Pay Off My Mortgage?
- Simple Ways to Lower Cost of Living
- Renting Versus Buying Dilemma
Image Source: alancleaver_2000’s photostream
Elena Moiseenko is the author of Personal Finance Blog dedicated to providing people with optimistic outlook on life.
Elena enjoys reading and writing at her spare time, traveling around the world;
loves hanging out with friends and helping people in need;
and most of all, wants the world to be a happy place to live for everyone.
That’s why she started this blog.
We hope to see you again. Check back later for the new updates to our Healthy Lifestyle and Personal Finance Blog. There is so much more to come!
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