In the midst of all of your holiday celebrations, you may want to consider devoting some time to thinking of a great New Year's resolution. If you're struggling to come up with a good idea, keep in mind that the economy has been struggling for quite some time now, and the predictions for 2013 indicate that it may continue as such for a while. So the time to tighten up your personal finances is now. Here are four options to consider:
1. Get Yourself on a Budget
If you're going to improve your finances at all, the first thing you need to do is to set up a personal budget. The process is simple: Record all of your monthly income on one side of a page, and list your expenses on the other. To ensure that it's accurate, include amounts for annual expenses such as health insurance or auto insurance premiums, as well as property taxes. Then, take a close look at all of your expenses to see where you can cut back. At the very least, ensure that you are spending less than you are earning each month.
2. Eliminate Credit Card Debt
The average American carries roughly $8,000 in credit card debt. If you have approximately this much debt, it means that you must pay roughly $1,000 in interest payments on an annual basis. Wouldn't an extra grand come in handy each year? Find out how much debt you have, and implement a plan to pay it off as quickly as possible.
3. Save More for Retirement
Roughly one-half of Americans have less than $25,000 saved for retirement, and approximately one-quarter have as little as $1,000 set aside. How much money will you need for retirement? If you use one of the many online retirement calculators available, you may be stunned at the results. You'll surely realize that the time to start setting aside money for retirement is now.
4. Reduce Monthly Bills
Commit to reducing your monthly bills, and you may have a very lucrative 2013. You can cut back on your cell phone plan (especially if you have an unlimited plan that you don't need), and you can also consider reducing or eliminating your cable package, reducing your Internet connection speed, and perhaps even eliminating your land line telephone service, which will save you bundles.
How to Implement These Strategies
It's important to set goals for yourself, and it's even more important to come up with a plan to follow through with them. Although the concept may be a little dated, I still rely on the SMART strategy: Your goals should be "specific," "measurable," "attainable," "relevant," and "timely."
Write down exactly what you want to achieve, and make sure it's something you can easily keep track of. If it makes you more comfortable, set conservative goals - at least in the beginning. Create your goals around the savings objectives you want to achieve, and include a time frame. By doing so, you'll be able to stay on track, monitor your progress, and adjust your goals as you move forward.
Although the holiday season is a busy time, your calendar won't be so overfilled with holiday celebrations that you can't put at least a little thought into forming achievable New Year's resolutions. Get off to a great start in 2013, and you'll enjoy the financial benefits for years to come.
What financial resolutions are you considering for next year?