A Resolution Worth Keeping
You said it last January, and you’re saying it again this January: “This year I’ll finally stick to my new year’s resolution.”
Maybe it’s to lose weight, or start a college savings account for your children. Or if you’re like many Mamapedia moms, your number one New Year’s resolution is to get out of debt.
We know getting out of debt is a challenging goal, but it is certainly a worthwhile one. Almost half of American households carry credit card debt month-to-month, so the battle is common. That’s why Mamasource has teamed up with SavvyMoney as our partner to help you reach your financial goals in 2012.
SavvyMoney simplifies your debt payoff each month by letting you create a personalized payment plan. They also provide useful tips and tricks around debt payoff and money management via their Director of Education, Jean Chatzky (who Mamapedia readers may recognize as a national TV personality and best-selling personal finance author).
So, Mamapedia asked Jean to share some new year’s resolution money tips.
Here’s what she told us:
1. Make a plan for the year. Determine your over-arching goal and write it down, whether it is paying down debt, putting more in retirement savings, or paying for a vacation in cash. Then, set some benchmarks by breaking that goal down into manageable pieces. If you’d like to save $5,000 by the end of the year, recognize that that’s $400 a month, $100 a week. If you focus on that weekly amount, you’re more likely to get there.
2. Automate—but pay attention. Most people benefit from a relatively hands off approach to their savings. Set it up so your employer pulls money out of every paycheck and deposits it in your 401(k), or allow your IRA provider to deduct a set amount from your checking account. That way, you don’t have to make the decision to save. But that’s where the automation should end. You need to look at those investments once in a while and see that you’re on track.
3. Put a windfall to work. Right now through the first few months of the New Year are ripe for windfalls: an end-of-year bonus, a raise, or a tax refund. The best thing you can do with this money is pretend you never received it. Funnel a bonus or tax refund directly into savings, without giving yourself a chance to spend it (if you’re carrying credit card debt, use this cash to pay it off or make a solid dent in your balance). When you get a raise, bump up your retirement contribution to match the increase in salary—research shows that otherwise, you’ll adjust spending to the new amount and hardly feel like you’re earning more.
4. Spend smart. Start the year with a bill audit. Look over every bill that comes in this month, paying particular attention to the ones you pay automatically with a draft from your bank account or bill pay through your bank. You’ll likely find you’re paying for things you don’t need or didn’t even know you had—extra cell phone minutes, HBO when your favorite show is in the off-season, an equipment protection program from your satellite TV provider. Call your insurance providers and see if they’re willing offer you a better rate.
5. Earn more. If you’re truly not going overboard with the discretionary spending and you still can’t get ahead, you may not be earning enough money to support yourself. If you haven’t gotten a raise in a while, it’s okay to ask for one now, but approach the situation lightly in this still-shaky economy. Go to your boss’s office prepared with ammunition—lay out how you save (or earn) the company money and how much competitors are paying people in your position. If you work for yourself, the New Year is the perfect time to raise your rates slightly.
And, here’s the best part: SavvyMoney is running a new year’s resolution giveaway contest just for Mamapedia mothers. Any Mamapedia mom who fills out our debt survey will be entered in the giveaway. The winner gets 2 FREE hours of personalized money coaching with Jean Chatzky herself. There are lots of other great prizes too, like free books by Jean Chatzky and a free lifetime membership to SavvyMoney. Read about the full giveaway rules here.
So, get your financial year off to a great start, and fill out the survey. Best of luck! We’ll let our community know when a winner is selected at the end of January.
