2010 Financial Resolution Guide: 10 Choices – A La Carte Style
Ablang
Posted: 29 Dec 2009 06:54 AM PST
Looking for Financial Resolutions that you can Actually Stick to this
Year?
If anyone knows how hard it is to stick to resolutions, it’s me. If I
had a dollar for every time that I vowed that I was going to… stop
talking about how real Sasquatch is, or… stop farting in the company
of my dog and blaming it on him – then I’d be rich.
Giving a one-size-fits-all personal finance resolution list is
incredibly unrealistic, and just downright arrogant. That’s why I
wanted to provide a list of 10 financial landmarks that you can set
out to achieve in 2010 to enhance your financial well being and build
a good foundation for the future.
My challenge to you is to pick 3 of the 10 to focus on in 2010 and
share what they are in the comments. Cross more than three off the
list? You’re an all star. Have all of these crossed off your list
already? Then what is next for you? Share with us!
1. Start up an IRA
An IRA is ESSENTIAL to any retirement strategy. If you don’t have one,
what are you waiting for? It wouldn’t be a bad idea to have both a
traditional and a Roth IRA either, to give you options come tax time.
I recently moved my IRA from ETrade to TradeKing, because Tradeking
offers zero inactivity fees, zero annual fees, they get consistently
good reviews, and trades are only $4.95. It might be a good place to
start. Also, check out my recent post on 2010 maximum IRA
contributions for some pointers on IRA limits and deadlines.
2. Create a Budget – and Stick to it
This should really be step one for everyone. And I’m not just talking
about looking at your Mint income and expenses and if you’re in the
black, calling it good. True planning requires you to know every
source of recurring expenses and income and then planning for the
larger one-off expenses. Here’s a free budget planning worksheet that
I created and use to get you jump started.
3. Rollover Old 401K Monies Into your IRA
If you have old 401(k)’s from previous employers just sitting around,
they may be doing nothing but collecting high maintenance fees.
Consolidation of your retirement accounts can be extremely motivating
and save you money in the long run. Not to mention, it can be
extremely difficult to get an overview of your diversification across
a large number of retirement accounts.
4. Downgrade your Vehicle
My decision to sell my vehicle and start taking public transportation
was one of the best decisions that I ever made financially. If you are
able to go that far, I’d highly recommend it. I estimate that I was
able to save, at a minimum, $3,500 annually.
At the same time, I reduced my total carbon footprint by 1.3 tons
(10%) annually. If public transportation is not an option, and you are
making payments on a vehicle, consider downgrading to save extreme
cash in 2010.
5. Get your Full Employer’s 401(k) Match
Whether your employer is willing to match 2 or 100% of your 401(k)
contributions, its crazy not to take advantage of the match, if you
have the money available to contribute. Check with your employer to
see how you can maximize their match.
6. Save a Year’s Worth of Living Expenses in your Emergency Savings
It may sound like a bit much, but if you are able to do it, it can be
a life saver. With my wife being laid off for 3 months in 2009, I
don’t know what we would have done had we been living paycheck-to-
paycheck. Here are some tips on getting your emergency savings ramped
up.
7. Eliminate all Bad Debt
Virtually all debt outside of student loans and mortgages could
rightly be considered ‘bad debt’. Make 2010 the year that you will pay
it off and begin a new financial chapter in your life.
8. Clean up your Credit History
Annualcreditreport.com (a govt. mandated site) offers you three free
credit reports annually from each of the three major credit monitoring
companies – Equifax, TransUnion, and Experian. Space them out 4 months
apart to stay on top of any major changes. Close down all accounts
that you have no intention of using again and dispute any
discrepancies or strange items that you cannot explain.
Watch out for credit score upsells, and by all means, stay away from
less reputable sites such as freecreditreport.com.
9. Cut your Utility Bills
With a combination of simply asking and doing a little research, you
can cut your bills significantly. In 2009, I was able to cut my phone
bill in half with Ooma (for a savings of $30/mo.), and cut my Comcast
bill by 33% (for a savings of $43) without losing any service! That’s
$73/mo. in savings, or $876 annually!
10. Plan your Meals at Least a Week in Advance
May sound kind of ridiculous, but planning out your meals ahead of
times ensures that when you go grocery shopping, you purchase
everything you need. This cuts down on impulse food spending from
eating out or worrying about where you’re going to find your next
meal. It also eliminates the stress of not having your next meal
around (we’re hunters by nature, after all).
Reader Discussion:
* Which 3 of the 10 would you pick to focus on? Why?
* Have all of these crossed off your list already? Then what is
next for you? Share with us!
* What are your financial goals for 2010?