5 Ways to Be Better With Money in 2014, Cause You Know You're Broke After the Holidays

One perpetually common New Year's resolution is to "be better with money." But what does that mean? If you're vague about improving money habits, you'll get nowhere. You'll pack your lunch and brew your own coffee for a week and then lose interest. It's better to pick a couple specific money matters to concentrate on, like getting a credit report, opening an IRA, or finding a better bank account. Here are 5 specific things you can do to be better with money in 2014.

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Bank Online Only (And Cut ATM Fees)

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Online-only banks have no physical branches and no ATMs; everything is done electronically. This has several advantages: To deposit checks, you simply scan and upload them (or mail them in), avoiding bank and ATM visits and lines. If you move around or travel a lot, you don’t have to worry about your bank not being wherever you go. And without ATMs of their own, most online-only banks will reimburse you any ATM fees you incur, which means never having to worry about finding your bank’s ATMs in order to withdraw cash. I’ve been using online-only Ally Bank for a few years, and it awards interest on (free) checking accounts with no minmum balance and has just generally been great (unlike with many banks, customer service has been phenomenal). Other well-rated online banks include Flagstar and USAA.

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Automate It

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Whether it’s your utility bills, your cell phone, or your student loan payments, the surest way to avoid late payments and fees is to automate your bill pay. You can also automate putting money into savings. Retirement account contributions generally can (or must) be automated; and many companies offer the option to divide direct deposit pay between bank accounts, allowing you to allot a certain amount of each paycheck to go directly into a savings account. “Properly set up, it will actually become more difficult to stop the automatic flow of money to where it serves your goals, than to let it continue,” says Mint personal finance blogger Joshua Ritchie. “This, after all, is the point. Ideally, you should strive to remove the elements of volition and willpower from the savings and investing process as much as possible.”

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Rethink Your 401(k)

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If your employer offers a 401(k) plan, they may also match funds up to a certain percent. It’s silly not to take advantage of that by putting in as much of each paycheck as you can, because that matched money (albeit tangibly deferred) is cash that you otherwise wouldn’t be getting. Employers may match, for example, 50 percent of what an employee puts in up to the first X percent of salary (5 or 6 percent is pretty standard). ”If you’re saving just 3% of salary, you’re missing out on half of the potential match,” writes Forbes columnist Ashlea Ebeling. “Many employers automatically start employees at a 3% savings rate if they don’t opt out or elect otherwise. Don’t be fooled thinking your employer has your best interest at heart; it costs your employer to provide the match after all. Bump up your savings rate to 6% to grab the full match.”

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Open an IRA

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If you’re a freelancer, a consultant, self-employed, or working somewhere that doesn’t offer a 401(k) plan, you may want to look into opening an individual retirement account. Even if you’re in your 20s, it’s still a smart way to save, tax-wise, and a lot easier (and less risky) than many young people think. Some experts even recommend IRAs in lieu of or addition to employer-sponsored 401(k)s. With an IRA, your retirement account is portable if you switch jobs. With a Roth IRA, you can withdraw money you deposited (just not earnings on that money) at any age without penalties. And with a traditional or Roth IRA, you can withdraw a portion of money penalty-free any time if it’s going toward things like buying a first house, paying college expenses (for you or children) or paying medical bills.

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Check Your Credit Score

If you plan to sign an apartment lease, set up utilities in your name, buy a car, or own a house anytime in the nearish future, it’s important to know your credit score (so you can work on improving it if need be). And even if none of these things are on your horizon, it’s still a good idea to view your credit report annually to check for fraud. Check your credit report for free from any of the three major credit bureaus (Equifax, Experian or TransUnion) or from sites such as AnnualCreditReport.com and CreditKarma.com (and stay away from other websites – there’s a lot of fraud out there in the credit report realm).

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