New Year’s Resolutions

New Year’s Resolutions

While you’re contemplating your New Year’s Resolutions for 2011, I hope you can identify something simple that might improve each area of your life, including the financial/money area.  Here are some quick things to do on the financial side that can make a difference:

1)      Review your spending plan:  Are you on track with your spending plan?  Do you have one?  If you think you’d benefit from using a spending plan (and most people would), don’t get stuck on the idea that you need to go BACK in time. Start tracking your actual spending in January and February, then set up a time in March to review what you spend and set up a plan.  Pick one area that’s important to you:  Do you give the kids money whenever they ask?  If so, track that area over the next 2 months and decide if you might be more disciplined by using another approach.  Do you eat out – a lot?  Set a goal for the number of times per week you’ll eat out, and track your savings.  Most people have one or two areas where they can save simply by adding some focus.  Find that area, pay attention to it, and set a goal!

2)      Increase your savings:  For pre-retirees who are still adding to savings, give your savings rate a boost.   Maybe you’ve set aside 5% of your salary every year for the last 5 years.  This year, commit to raising that percentage, even if it’s by one percentage point.  If you save an additional $600 per year for 20 years at 6% interest, that’s an additional $22,000.

3)      Look at those ongoing memberships:  Companies have discovered that consumers like to “set it and forget it”, and have now designed membership plans for almost everything.  Look at your monthly memberships and fees:  for movie clubs, health clubs, internet-based membership programs – anything that automatically renews – and decide if you want to continue the membership into 2011.  You may decide that based on your usage you want to join a different health club that has fewer amenities but is closer to home, or that you really aren’t using all of those tips from the online membership program you subscribed to a couple of years ago.  If you miss these services, you can always re-join; but if you’re not using them, feel free to let them go and decrease your spending every month!

4)      Order your credit reports:  You can get a free credit report once per year from each of the three main credit reporting agencies.  Go to and review your information.  Do this at the same time each year – no reason not to pick January – to make sure nothing is inaccurate in the reports.  Credit reporting is being used not only for credit purposes, but also for determining risk (and, therefore, premiums) on auto insurance policies, and in some cases for employment purposes.

You probably know of one area that can make a difference for you in your finances in 2011. Take a few minutes and decide what’s most important, and tackle it now, before you lose the excitement and enthusiasm of the New Year!

Happy 2011 Everyone!