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Home / Finances / Time To Remake Your New Year’s Resolutions

 

Well, here we are, going into the third full week of the New Year. Twenty days after committing to those hardline New Year’s resolutions. Have you fudged on all of them yet, or maybe just one or two? You are not alone. Some of the easiest resolutions to fudge on are the financially related ones. Often that is because they were too broad or too harsh to begin with. Why not recommit to becoming financially sound in 2014? Here are a few resolutions that will help you put your financial house in order and you may find them fairly easy to stick to.

Track Your Expenditures

I think that I have written this subtitle a thousand times over the previous years, but it still holds true. The first step to any financial goal has to be tracking where your money is going. After all, how can you stem the tide if you do not know in which direction the water is flowing? Through trial and error I have found that the easiest way to do this is with a pocket notebook and a spreadsheet of my own creation. I walk out of the store I have just spent money in and write down how much I spent. The same day I enter everything into the spreadsheet. Admittedly, it takes a little while to form the habit of writing everything down, but it will come.

Put Your Credit Cards Away

This one can be difficult. Many of us have a hard time delaying gratification, so re-training ourselves can be a problem. You can put your credit cards in an inconvenient place for starters. For example, put them in a locked toolbox that is always outside. Where is not as important as why. If you put them in an inconvenient spot, then you will force yourself to take time to get to them. That time will allow you to think about whether you really need to buy an item right then or could you wait and budget for it later, so that you can use cash instead of credit.

Do Not Over Commit

There was a time when I found myself over $10,000 in credit card debt and over the limit on all of my cards. The payments were horrendous and I was having to make other payments late in order to pay the minimums on the cards. It was a vicious and destructive cycle that many of us can get into. So, I resolved to aggressively pay down my debt. I decided to pay double my monthly payments and be done with the cards. How to find the money, though? I shut off the cable, internet, and phone. No more renting movies, bare bones at the grocery, no going out…you know, the usual list of self-sacrificing money savers. That worked for about one month, then I was so sick of sacrificing, I chucked the whole plan and spent stupid amounts of money treating myself. Next, came the guilt from spending that money and I became depressed.

While that story sounds sad and drastic, it is pretty common. It took me several years to learn the right way to pay down my debt. The first step is to set a realistic goal. Paying off your debt in a single year is unrealistic, but paying the minimum payments on each credit card plus the amount of interest on each statement is achievable. If your mortgage or car loan are the issues, try dividing a single payment by 12, then adding that amount each month. It is an easy amount to come up with and will lower the amount of total interest you pay over the life of the loan.

Lower Your Recurring Bills

This is the easiest way to keep cash in your pocket. You can start by examining each of your recurring bills. Look at your cable bill. Do you pay for premium channels that you rarely watch? Look at your utilities. Can you change your normal thermostat setting by just two degrees or set the water heater down one setting? Next is your insurance bill. Do you have the same provider for all of your needs? Can you afford a higher deductible? Have you shopped other carriers in the last year? Once you get into the flow of things, you may find that you have quite a bit of fat to trim from those bills.

There are dozens of other financial resolutions that you could make this year, but these are the easiest to do, well, on  paper at least. Hopefully, you will find one that you can stick to and improve your financial life in 2014.

 

About the author: Jerry Coffey

 

Jerry Coffey spent many years in a debt-riddled gray area somewhere between broke and desperately broke. His seemingly endless need for more and more cash led him to payday loans, repossessions, bankruptcy, and depression. After years of the same financial style, he heard a piece of advice that inspired him to find a way to change. The advice: ''The very definition of a fool is someone who continues to do the same things, but expects different results.'' This led him to a much more frugal lifestyle that sees all of his bills paid on time and a growing savings account. Even the seed of a retirement account has begun to sprout.

 

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