Financial Resolutions
by Gary Foreman
Description: Financial resolutions to get your budget off to a good start for the new year.
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This is the time of year when many people take stock of themselves and
their future. So alongside your plan for a trimmer waistline, we'd like
to
suggest some financial resolutions for the new year.
Resolve to save at least $1 each day. It doesn't seem like much, but it
does add up faster than you might think. You've probably seen the
numbers
before. Let's assume that you earned 10% per year on your savings.
That's
the long-term average for the stock market.
At the end of 10 years you'll have nearly $5,000. After 20 years you
will
have accumulated over $20,900. If you start at age 30 and keep it up
until
you're 65, your measly $1 a day will have grown to $99,000!
So how will you save $1 a day? How about bringing soda to work instead
of
hitting the vending machines at break time? Or skip the 'supersize' at
lunch. If you can't think of something ask your friends or family for
their
ideas.
Maybe you'd rather do the whole week at one time. How about staying in
for
lunch one day a week? Carpool twice a week with a neighbor? You get the
idea. Anything that'll help you save $1 a day or $365 a year will work.
Certainly there's somewhere in your expenses that can be squeezed that
much.
Resolve that your credit card debt will not increase in any month this
year. A comic once said that the first key to getting out of a hole is
to
quit digging. It may not be funny, but it is true.
To keep your card balances from increasing you'll need to pay off any
new
charges you make each month and also pay any interest caused by your
old
balance. For some people that will be tough. They see no connection
between
using a credit card and paying it off. They think that paying the
minimum
each month is a major victory. It isn't.
Keeping this resolution will require you to keep track of your credit
card
spending and to stop spending when you run out of money.
Roughly one third of all credit card users carry a zero balance. While
you
might not be able to achieve that goal this year (wouldn't it be nice
if
you could!), you can manage to keep your financial hole from getting
any
deeper.
The next resolution will help you achieve the last one. Resolve to
consider
alternatives before making any
purchase of $100 or more. Over the last 30 years the size of the
average
home has grown by 50%. And, self-storage locations are a fixture in
most
towns. The reason for this is simple. We buy too much stuff and then
have
to store it.
The concept is simple. Before making any major purchase wait a couple
of
days. Use the time to think about ways you could get the benefit
without
spending the money.
Do you really need a new fertilizer spreader? Couldn't you borrow one
from
your next door neighbor? Rent one? Or even buy one used?
Often going to the store and pulling out the plastic is not the best
way to
achieve your goal. But you'll never know unless you think about
alternatives first.
Resolve to have a proper will and estate plan. No one likes to think
about
their death. But, everyone should legally prepare for it. Even if
you're
young, single and don't have any children. If the unexpected happens
someone will need to step in and make decisions about your funeral and
take
care of closing out checking accounts, IRA's and selling your car and
other
possessions.
Everyone should have a will. And, many will want to have a 'living
will' to
state their preference on being kept alive using life support
equipment.
It's wise to also have a plan in place in case you're incapacitated.
These documents aren't as expensive as you might think. And, in most
cases,
they'll work fine for many years. Take the time this year to put the
proper
legal papers in place in case something happens. Your loved ones will
already be dealing with grief. Don't make them deal with legal
complexities, too.
Finally, resolve to learn one new money-saving tip each month this year
and
put it into practice. There are literally thousands of ways to save
money.
You really don't have to look very hard or very far to find good ideas.
It's simply a matter of making up your mind that saving money is
important
to you and you're willing to put forth a little effort to accomplish
your
goal.
Try one new money-saving idea each month. You might just find that you
end
the year in much better shape than you entered it. Isn't that what
resolutions are all about?
Gary Foreman is the editor of The Dollar Stretcher.com website and
newsletters. You'll find thousands of articles to help stretch your day and
your dollar. Visit Today!
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