New Year’s Financial Resolutions

It is that time of the year again to make your New Year’s resolutions! Each year most people decide on a number of changes to make for the coming year. How about including your financial life in this year’s resolutions. Let’s take a look at some ideas.

Investigate 401k Employer Matching Contributions:  Most 401k plans provide for employer matching contributions. The match consists of the employer contributing a certain dollar amount to your 401k account based on the dollar amount you contribute. For example, your 401k plan has a dollar for dollar employer match up to $1500. For every dollar you contribute to your account, your employer will also contribute the same amount to your account. Once you have contributed $1500, your employer will stop contributing. Think about it – you put in $1500 and your employer puts in $1500, now your 401k account is worth $3000! That is called ‘free money’ from your employer. Each plan is different so you need to check with your Human Resource manager to determine about your employer’s matching contributions.

Start A Savings Account:  Are you always having problems saving? A good solution is to have a set dollar amount automatically taken from your paycheck and deposited into a separate account. This account can be a saving, money market or mutual fund account. Start off slow, $25, $50 or $100 each month. Come June, you should double the amount. If you deposited $25 a month and double to $50 in June, by this time next year you will have $475 extra. Your deposit amount is less than a dollar a day which is less than one McDonald’s coffee a day. Put away $50 a month, double to $100 in June, and you will have $950 at the end of the year. For those able to save $100 a month, then double to $200 in June, a total of $1900 will be your savings for the year.

Track Your Expenses:  Not sure what you and your family are spending on all those expenses? Also, do you have trouble staying on those day-to-day budgets? Try this tip:

Day 1: Spending no more than 30 minutes, write down all your monthly fixed expenses (examples include: mortgage/rent, internet, and car payments) and what dollar amount you spent on each. Do this first step from your memory.

Day 2: Again no more than 30 minutes, look through your checkbook and see what monthly expenses you have forgotten and correct any amounts you misquoted on Day 1. Also, add in any monthly variable expenses (examples include: clothing, groceries, car maintenance and fuel, and home utilities such as electricity, gas/oil and water).

Day 3: Still just 30 minutes, pull out those credit card bills and come to terms with what and how much you charge on your credit cards. Plus, be sure and note all finance charges and late fees.

Day 4: Pull all those expenses together and see if there are any revelations. At this point, you have some good information. Now, you have the choice to modify your spending habits.

These financial tips can begin with the New Year and last a life time!


4 Ways to Use Your Money Wisely

You can manage your personal finances by utilizing your hard earned money in a proper way. You have to save money to cement a lucrative lifestyle and eliminate your financial woe. If you are struggling to pay off your debts then you can enroll in a debt management program to attain financial liberty. In this article you can get an idea about the steps you should take to eliminate your debt and secure your financial future by building an emergency fund.

Here are a few ways that will help you pay off your owed amount and save a considerable amount of money:

  • Avoid taking out new loan:

You need to change your habit of borrowing money otherwise it might be difficult to come out from the vicious cycle of debt. The first step towards a debt free life is to stop taking out loans to manage your expenses. You can never come out from the debt trap if you frequently use your credit card or take out a payday loan to meet your daily expenses.

  • Prepare a budget plan:

Budgeting helps you track your expenses so that you spend within your means. When you formulate your budget make sure that your expenses do not exceed your income, otherwise you need to redesign your budget again.

  • Open an emergency fund:

Your topmost priority will be to deposit a portion of your income in the bank as an emergency fund. Every month you should contribute a stipulated amount in the savings account to use in time of financial crisis. After you eliminate your debts you can set aside a considerable portion of your income to deposit it in your emergency fund.

  • Eradicate you debt by paying it off:

The financial guru Dave Ramsey recommends the debt stricken consumers to pay off their debts with the help of a snowball method. They can make a list of the owed amount along with the interest rate in an ascending order. Make payments on your small interest debts and make minimum payments on the remaining debts. Once you have paid off your small interest debts then you can concentrate on paying the high interest debt.

Therefore, these above mentioned tips can guide you to make proper use of your money so that you regain your financial independence.