Betty’s New Year, New You Series
Smart Money Moves for the New Year
5 ways to take control of your finances in 2009
-Laura Weber Rossman
Betty’s New Year, New You Series is dedicated to making 2009 your best year ever. Find more articles in the series below.
As you greet the New Year with optimism and hope, make 2009 the year you take control of your money. With today’s economy there is good reason to move your finances to the top of your New Year’s resolution list and take action and responsibility for your finances.
A recent survey by State Farm found that almost three-fourths of American women feel anxious about their retirement and their financial future. Yet, only 15 percent have made major changes to their financial plans. More than two in five (41 percent) find going to the dentist less excruciating than talking to their spouses about their daily finances.
So if you’ve been dodging the topic of managing your finances, change your ways and tackle it in 2009. Try one – or all – of these money-managing resolutions.
1. Get your credit cared debt under control.
If you have balances on your credit card accounts and are finding it difficult to pay the minimum amount, make getting out of credit card debt your top resolution. The interest rate charges you are paying make it hard to ever get yourself out of this hole unless you take action to change your ways. Is that new blouse really worth twice what you paid? If you calculate in interest rate charges, that’s probably what you paid – maybe even more. So put the cards away. Get a plan in place to begin paying down your balance every month; and, promise yourself that you will live on today’s income not your future income.
2. Make sure you have an emergency fund.
In these uncertain economic times, it is more important than ever to make sure you can cover living expenses if you lose your job. An emergency fund should be able to cover all your fixed costs – housing, food, loan payments, insurance, etc. Figure out what your basic cost of living is for a month, and then make sure you have enough money in your “emergency fund” to cover those costs for six months. If you can set aside even a bit more to cover an emergency such as an automobile repair or medical emergency, even better. The money should be in a savings account, like a money market account, that you can access quickly if you need it. Do this even if you feel your job is secure. It’s a great security blanket and you’ll sleep better.
3. Keep contributing to your retirement plan.
And if you aren’t contributing, get started. It’s tempting to stop with the state of the stock market or maybe your employer has stopped matching your contribution. But investing in these tax-deferred accounts is critical to your financial security in the future. It is especially important for women who tend to live longer and generally make less leading to lower social security payments in the future. Keep contributing like your future depends on it … because it does.
4. Have a financial plan.
Without a financial plan, how do you know where you are going or if you are reaching your goals? It’s not all that different than creating a weight loss plan – and requires some of the same discipline – but oh the rewards! You need to track your expenses so you know where your money is going. Then figure out what you can change to meet your savings goals. There are lots of Web sites that can help you. Try mint.com or quicken.intuit.com or ask a friend what they use.
5. Even if it doesn’t make sense to hire a financial planner, find a “money buddy” and work together to get your budgets under control and a plan in place.
So stop worrying about what you haven’t done or what you did that you shouldn’t have with your money. Make 2009 the year you take action to get your money plan in place.
More in the New Year, New You Series: