Get Your Finances on Track for the New Year and a $100 Giveaway
Happy New Year! Another holiday season has come and gone. Hopefully you aren’t in a cold sweat waiting for this month’s credit card bill! One nice thing about a new year is the opportunity it brings for change if you aren’t where you would like to be with your finances. What would you like to accomplish this year? Pay off debt, save for an emergency fund, stop living paycheck to paycheck, save for retirement? Maybe you had a great 2012 and want to continue on the same path. January is a great month for taking a look at your finances and making plans for upcoming year.
What Are Your Goals?
Goals kind of get changed or forgotten if no one knows what they are. Take some time to put down what you would like to accomplish this year. I like to have some goals that I know I can accomplish with a little effort and some stretch goals to really try my hardest. An easy goal might be to save $50 a month toward an emergency fund or to put toward debt. A stretch goal might be to pay off all credit card debt by the end of the year.
Am I Saving Enough?
If you have an adequate emergency fund and are actively saving enough for necessities and retirement, skip this one. If not, this is a good time to look at what you are spending and determine if it reflects your values. In 2012, Americans spent $44 billion on tobacco, $50 billion on alcohol, and $69 billion on gambling. (For a list of other waste that will blow your mind, read this article) If you are spending your hard earned money on one of these things or something else that does not benefit you or your family, this might be a good time to see how cutting back or quitting might affect your savings and debt. If you are single, have enough money, value these things, and are not hurting anyone, knock yourself out. If you have or want kids and don’t have enough money for things you need or want to do, is that $7 pack of cigarettes really something that is worthwhile?
Look at Your Withholdings
With uncertainty about the fiscal cliff and what it will do to your taxes (at least as I’m writing this), one sure way to keep your paycheck from shrinking is to re evaluate your withholdings. Do you always get a tax refund? While it might be nice to get that “windfall” come tax time. That is YOUR money that you are allowing the government to hold, sans interest. Do you feel that is the best use of your salary? If you don’t anticipate any huge changes in salary and usually get a refund, adjust your withholding so that you can keep more of your paycheck. If you are concerned about having a tax bill, save it in some sort of interest bearing account until you file your taxes. Even if it only earns .02%, that’s better than what Uncle Sam is paying.
Think About Retirement
If you aren’t saving for retirement, why not? If it is because you are living paycheck to paycheck, now is the time to fix that. Once you have some emergency savings, start putting something away for your future. If your company offers a match for retirement savings, take that money, even if you don’t earn much.
I have heard employees tell me they don’t make enough for savings to matter or that their spouse saves for retirement. Look at the numbers. Let’s say you earn $25,000 per year, and you’ll never get a raise. If your employer matches 3%, that’s $750 a year. $750 may not sound like a ton in terms of retirement, but if you invest that every year at 6% for 30 years, that’s over $62,000 in free money! Would you turn down $62,000? Go sign up today. That’s only $14.42 a week from your paycheck or about $11.50 after tax savings. Can you live without $11.50 a week to have over $60,000? Don’t pass up free money!
To help you get a jump start on your new plans, I am co-hosting a giveaway for $100 in PayPal cash or an Amazon gift card until January 12th. It is very easy to put things off, but start today, and get a jump on your finances for the New Year. Hopefully, by next year, you’ll be able to say you gave your best effort to put yourself in a better place mentally and financially for the year.
Have you ever had a money wasting habit? How did you or how do you plan to change it?
If you have a blog and would like to host a giveaway, check out this link.
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You know when I saw this question of yours: Am I Saving Enough? My answer was- way not enough as looking back at my experience it is impossible to predict every single financial difficulty that can happen. But at least I am ready to most of them, because unlike many Americans I am saving all the time. Retirement is an issue for me, since I am only 25 and no matter what I am telling to myself, it always seems that my pension is so far from me. But really your article was worth to read. We should all follow some very simple rules!
Spend less on eating out!