How To Be Better With Your Money This Year Because — Oops! — You're Broke
Oops! You're living paycheck to paycheck again. How did that happen? Money is tough but there are a few ways to make this year a bit better when it comes to handling your personal finances. Thirty-four percent of Americans set financial resolutions goals, but only 8% are successful in achieving them, according to a 2012 University of Scranton study published in the Journal of Clinical Psychology. Let's be part of that 8%. Here are a few tips:
1. Start small
You aren't going to become Suzie Orman overnight (and thank God. Can you imagine two of her?) Start with baby steps. Jennifer Calonia, Editor of GoBankingRates.com, says, "Scale back this year by allowing yourself to attack a baby-stepped financial resolution. If your 2013 resolution was to stop buying Starbucks every work day and put that money into a savings account instead, commit to only visiting Starbuck three times out of the week. It’s a smaller goal, but you’ll be better off when you don’t have to cut things cold-turkey.”
2. Get responsible about credit
A lot of people can fall into the credit trap because sometimes it doesn't feel like you are spending money when you use a card. Heck, if you are shopping online you don't even have to get your card out. But this can eventually lead to major debt problems. And if you think you are in good shape by paying only the minimum every month you would be wrong. When you make the minimum payment, you end up paying more in finance charges. You could save possibly thousands of dollars in interest by increasing your monthly credit card payments.
Also check your credit report. If you haven't done in a while, the beginning of the year is a great time to do so. You’re entitled to a free credit report through annualcreditreport.com.
3. Kick Online Shopping in the Butt
Online shopping is so conveniently wonderful, but it can also be horrifyingly addictive. It is a lot easier to get addicted to online shopping than real shopping because you don't have to leave your house and you don't have to wear pants. The thing is, any time you go online the Internet is trying to sell you something. It knows you. It sends you ads. It sends you coupons. Stores stalk you. You have to be the strong one. So:
- Use a free tool called StayFocusd to enable time limits spent on certain websites. Only allow yourself 10 to 15 minutes on shopping sites (or only between certain hours of the day).
- Unsubscribe! Take your name off all those sale and deal emails.
- When you are about to buy something online, step away from the phone or computer and really think about this purchase.
- Take your credit card off file at online stores. The inconvenience of having to retrieve it every time may also slow down your rush to buy.
4. Start working on your taxes now
Don't wait until April like everyone else to start getting organized. Make sure you have everything you need now. For those of you who are freelancers, this is going to require even more work and time so you need to start ASAP. You need your W-2s, 1099s, and bank statements. Collect all your charitable receipts, and organize any business expenses that you plan to write off. The sooner you can get everything together, the more likely you will get a return. If you know your taxes are going to be super complicated for one reason or another, get a professional to help you. Not messing up your taxes will be worth the extra money.
5. Make an emergency fund
Putting aside money in case of an emergency or an expected expense is always a good idea. This way you will have money at the ready so you don't need to cut into your day-to-day budget.
6. Cut back on electricity use
We're not saying to go completely Amish, but turn off a light when you leave the room. Turn off electronics when you go to bed. If you are in control of your heat, turn it down while you are at work. It will make a difference come bill time. Happy saving!