When it comes to keeping New Year's resolutions, many of us don't have such great track records. But with a survey from Fidelity Investments finding that an all-time-high 62 percent of those who made financial resolutions in 2012 actually kept them, you should look more closely at trying to improve your money situation as part of your annual resolution ritual.
To set the stage for your success, here are 13 resolutions to consider.
1. Track your spending.
It's hard to be smart with your money if you don't know where it's going. Creating a budget is sound advice, but many people find budgets too hard to stick with. So as an easier alternative, just commit to looking at what you spend for the month of January, with an eye toward finding unexpected expenses and other surprises that you can trim down. Then, see how small changes can make a difference in February and throughout the rest of the year.
2. Ditch your holiday debt.
If you whipped out your credit cards to spend a bundle on gifts, make it a priority to pay down those balances pronto. With credit-card rates still at extremely high levels, your debt could take years to pay off if you make minimum payments. Getting rid of high-rate debt is the best investment you can make.
3. Route that raise into savings.
Times are tough, and many workers won't get a raise this year. But if you're one of the lucky ones, don't go on a spree. Instead, use it as a way to boost your savings. Do that for a few years in a row, and you'll see a big impact on how much you save overall.
4. Only pay for what you use.
It's easy to see monthly bills for mobile phones, cable TV, and Internet service as necessities. But if you have pricey unlimited packages and aren't using them to the fullest, look to see if you can downgrade to something cheaper. Paying for things you never use is like throwing money away, and many companies will give you discounts just to keep your business.
5. Get that rainy-day fund going.
Having money on hand for emergencies can be a lifesaver when the unexpected happens, and it can save you a ton in finance charges for payday loans or credit-card cash advances. Don't let the standard-yet-daunting advice that you should have three to six months of expenses on hand get you down. Start small, and work your way up. In the meantime, even having an extra $100 or $200 in an emergency fund can be the deciding factor in getting you through a tough month.
6. Claim your match.
If you have a 401(k) or other retirement plan at work, look to see if your employer will match your contributions. The match is free money, and at some companies, setting aside as little as 3 percent of your salary toward your retirement can get you the full benefit.
7. Get more benefits from your benefits.
If your job gives you perks like health insurance or a flexible spending account, be sure to get the most bang for your buck out of them. Picking the right insurance plan can put more money in your pocket while letting you save on medical bills, while a flex account gives you tax savings on money you would have spent on medical expenses anyway. Talk to your HR department and find out what you have coming to you.
8. Learn the basics of investing.
You'll never be financially secure if you don't go beyond bank accounts and other safe places to stash your cash. Whether you find basic investing books or just keep checking DailyFinance for tips on handling your money better, make 2013 the year you take control of how hard your money works for you.
9. Open a discount brokerage account.
Having a broker used to be just for rich people, but nowadays, discount brokers make investing easy. With low minimum balances, access to commission-free products like exchange-traded funds, and big cost savings compared to full-service brokers, a discount brokerage account is a useful tool on the path to becoming a better investor.
10. Start a Roth IRA.
If you hate taxes, saving for retirement with a Roth IRA will be right up your alley. Income and gains on investments inside a Roth are tax-free, which could save you thousands of dollars in taxes after you retire. Most financial products, including bank accounts, mutual funds, and stocks, are available from within a Roth, so check with your favorite institution to get started.
11. Give yourself an insurance checkup.
Natural disasters over the past couple of years have reminded Americans that having the right insurance is a necessity. In addition, having enough life insurance can save your family from difficult financial challenges if something happens to you. Look at your coverage to see if it still meets your needs and those of your family, and add or remove policies as necessary.
12. Get rid of accounts you don't use.
Many people never go to the trouble of closing out old bank, brokerage, or retirement accounts that they've stopped using. But that leaves you subject to inactivity fees, potential identity theft, and other dangers from having open accounts you don't pay attention to. So, go ahead and close those accounts, or transfer them to institutions where you can keep better track of them.
13. Stop wasting money to make money.
Fees have become a fact of life in the financial industry, but you don't have to play by their rules. Find banks, brokers, and other institutions who'll serve you without charging an arm and a leg for their services. The money you save will mean much, much more in your pocket in the long run.
Happy New Year!
Resolutions can be hard to keep, but giving yourself easily attainable goals is a great path to success. Resolve to put your finances in order with these easy-to-implement ideas, and you'll feel better about your money situation when 2014 rolls around.
13 Financial New Year's Resolutions to Keep in 2013