A new year represents an opportunity to make a fresh start in many aspects of our lives, including our finances. In honor of our new decade, I offer 11 frugal resolutions to help you begin 2011 on a strong financial footing:
- Save before spending: Rather than spending every dollar you don’t need to pay bills, make saving a priority. Establish a savings routine and ‘pay’ into it like any other bill. The savings will add up and before you know it you’ll have a nice buffer for emergencies or a nest egg without much effort. Additionally, be certain to take advantage of any employee benefits you have available such as 401k matching and ‘cafeteria accounts’ (where you can use pre-tax dollars for such things as health and child care) — it’s like free money!
- Use credit sparingly: Credit is great to have, especially for unplanned expenses. To reign in your credit card expenditures, try in the new year to live as if you don’t have the option of putting purchases ‘on the card’ and see how your spending habits realign. Basically, if you don’t have the money in the bank, tell yourself you can’t afford it.
- Eat at home two times more per week: It is no secret that eating out is considerably more expensive than dining at home. Cook just two more meals each week in your own kitchen and you’ll be surprised at how much disposable income is freed up.
- Make a budget: The only way to know if you’re living within your means is go through your set expenses and allocate what’s left over for the extras. This can be an eye-opening exercise to get you financially on track.
- Examine your shopping/spending habits: Consider where and when you spend money. Could you shop at more economical stores, plan shopping more carefully to avoid convenience stores or pump up your coupon usage?
- Cut out the fat: Examine your expenses carefully — are you paying more for Internet service, insurance or cable television than you should? Eliminate extra or duplicate services you could easily do without.
- Make an effort to save resources like electricity, gas and water: While these are necessities, utility usage is largely under our control. Turn it off, turn it down and use less to realize significant savings.
- Use financial software for easier reporting, tracking and planning: Use the reports you can generate from the information tracked in your financial program to take control of your finances. Discover where your money goes and what expenses are coming up with ease.
- Organize your bill paying and filing process: Don’t sweat over a complicated system — it can be as simple as a box labeled with the month and year — but do keep track of your paid bills and invoices for easy reference when needed.
- Spend money on proactive maintenance rather than costly repairs: It’s the old ‘a stitch in time saves nine’ adage. Take care of what you have so it doesn’t break from negligence and need to be replaced.
- Pick a bill or debt and make it disappear: In addition to saving some of your discretionary money, choose one bill in particular that you’d like to pay up by 2012. Divide the total of that bill into payments that you can add to your budget throughout the year. You’ll be one bill closer to financial freedom in a year’s time and feel empowered by the victory over debt!
Rather than being a victim of your finances, making these small changes can help you exercise greater control over your financial destiny in the New Year.
{ 0 comments… add one now }