With the New Year fast approaching, many of us are thinking about resolutions we want to make so we can have the best year yet.
Unfortunately, the wonderful resolutions we take so much time to make are usually quickly forgotten by February 1st.
The good news is that if you follow this 4-week plan to organize your finances, this resolution will be on auto-pilot for the rest of the year!
- Track your weekly spending and create a budget at the end of the week.
- Now that you have your budget created, have a set amount of money transferred from your bank each month to your savings account. This will ensure that you will have CASH to spend on your next vacation or to purchase Christmas gifts.
- While you’re on your bank’s website, sign up to pay your fixed bills (car note, mortgage, etc.) automatically each month to avoid paying any late fees.
- Contact your auto and homeowner’s policies to make sure you are paying the least amount possible. If you are able to raise your deductibles it will save a considerable amount of money over the year. Bundling your insurance policies with the same company is also a cost-saving move.
- Check your credit report and score to make sure all the information is correct. I have written a post dedicated to requesting your free credit report and ways to improve your credit score.
- If you are anticipating receiving a large tax refund this year, consider adjusting your tax withholdings so you can receive the money throughout the year instead of waiting for it the following year. This “found” money can help fund your savings account or help pay off some debt. To assist you in calculating the correct amount to withhold, check out a post I’ve written about adjusting your tax withholdings.
- Scan the budget you created and see if there are any memberships you signed up for last year that you’re not currently using. I’m talking about gym memberships, museum memberships, subscriptions to Pandora, Netflix, Hulu Plus, Amazon Prime, etc. I know they seemed like a great idea at the time, but if you’re not getting your money’s worth, cancel the subscription. If you miss having the membership at a later date, you can always re-instate the subscription.
- Walk around the house and collect items that can be sold or donated. Look in closets, the garage, bookshelves and toy boxes. Gather quality items to be sold on eBay or at a yard sale and donate the rest. Be sure to get a receipt because your donation will qualify for a tax deduction if you itemize. Deposit the extra money from the sales to your savings account or use it to pay down debt.
- Research a cheaper way to watch TV. There are so many other options available other than cable or satellite. Some options are Hulu, Hulu Plus, Netflix and Amazon Instant Video. If you already have a Wii or Play Station, you currently have options to stream shows to your TV. All you have to do is pay a low monthly fee (usually around $8 per account) and you’ll be able to watch movies and current TV shows on your TV, computers and smartphones. If you don’t want to cancel your cable completely, consider dropping premium channels you don’t watch often. If you don’t have a Wii or Play Station, a Roku is a wonderful (and cheap $40) way to stream movies to any TV.
- If you have a good paying history, contact your credit card companies and request a lower interest rate. This is hit-or-miss but usually works.
- To help you plan for life further down the road, look into hiring a financial planner. In my opinion, the best ones to hire are those that are referred by family and friends. You can also search on your own on www.napfa.org. Try to find someone that charges by project or hourly. Interview many and go with your gut when deciding which financial planner to hire.
So there you have it. If you follow this 4-week financial plan, your finances will be working hard for you and will be in much better shape in 2014.
Let me know in the comments if you have any financial goals or resolutions for 2014. I know I have many!