Do you have a money goal or resolution? If you’ve decided to improve your financial outlook this year, here are several strategies to help you. Choose two or three of these tips and schedule the implementation. For instance, if you decide that you are going to take a class about managing retirement accounts, give yourself a deadline for registering for the class.
1. Get your money. Visit www.missingmoney.com and check to see if you have unclaimed property. If a business owes you a refund, and they are unable to locate you, they deposit the money with the state where you did business with them or where you were living at the time. When I first learned about this site a few years ago, I checked and found out that I had $2,000 in unclaimed property in Virginia. The process was simple. I completed a form, submitted proof of my identity and had my money in a few weeks.
2. Fast unnecessary spending for 21 days.This exercise will make it clear to you where you can cut back. Read The 21 Day Financial Fast by Washington Post columnist, Michelle Singletary.
3. Calculate your net worth. Determine the cash value of your assets. Subtract the amount of debt that you have. That’s your net worth. If you don’t like the number, choose one of the strategies in this post to address it.
4. If your money is a complete mess, and you don’t know where to begin, consider enrolling in Dave Ramsey’s Financial Peace University. This comprehensive nine-week class will teach you money management, how to get out of debt, what you need to know about insurance, and how to allocate your retirement assets.
5. Establish an emergency fund. Something will come up this year. Set aside at least $500 for the unexpected car repair or medical bill. Set up an online savings account. Deposit $5 to open the account. Fund this account with your tax refund and any unexpected money you receive. You can also decide to set aside $25 every pay day until you reach $500.
6. Investigate your options to save for retirement.Whether or not you plan to retire in the traditional sense of the word, there may come a time when you are no longer able to produce income. That time could come when you’re 40 or when you’re 80. Prepare for that time. Many employers will match your retirement contributions. If you are not contributing enough to get the employer match, you might as well be burning that money.
7. Increase your retirement contributions by 1%. While you will barely miss this amount now, it will pay you back later with considerable interest.
8. Set up a fun account.Want to go on a cruise when prices are cheap? Find out how much it will cost and start depositing money into a special account every month.
9. Help someone else.Visit www.WorldVision.org. Here you can make a onetime donation, sponsor a child on a monthly basis or fund a micro-loan to a small business owner.
10. Practice gratitude. Once a day, think of three things that you are grateful for.
11. Set a spending limit.Decide that before you spend a certain amount ($100, $250 or $500) on a non-emergency basis, you will consider the expense for 24 hours.
12. Prepare for your death. You could live to be 100, but you should have your affairs in order in case you die unexpectedly. Speak with an attorney about drafting a will and advance directives. If you have minor children, you will need to choose a friend or relative who is willing and financially able to take care of your children. Consider your need for life insurance. If someone else is dependent on you for income, you probably need life insurance. Term life insurance is best for most people. Determine if your employer, college alumni association or fraternal group offers a group policy. Clean up your financial house. Close credit cards and bank accounts that you don’t use. Prepare a summary of where everything is and make sure a trusted friend or relative knows where to find the summary.
13. Have the talk with your elders. Whether your parents are in excellent shape physically and mentally or are showing obvious signs of decline, you need to have a frank discussion with them. You need to review everything in the “Prepare for your death” paragraph with them. Additionally, determine how they want to live if they cannot care for themselves. Do they want to stay in their home with assistance? Would they prefer an assisted living facility? The best time to have these discussions is when your elders are able to make decisions and give directions.
14. Cut back on meals and beverages outside of home. If you are spending $30 a week on meals and beverages on the go, that’s more than $1,500 a year! This is money that you could allocate for emergency savings or your fun account.
15. Define wealth on your terms.Does it mean having all your needs met and being able to serve others? Does it mean having a net worth of $10,000,000?
16. Schedule time for money management (paying bills and balancing your checkbook) and wealth building (reading books and blogs about money, taking classes and reviewing investments). Make sure this is a time when you are alert and you won’t be distracted.
17. Mimic the financial behavior of Jews. Jews as a whole are wealthier than the general population. Want to know why? Read Thou Shall Prosper: Ten Commandments for Making Money by Rabbi Daniel Lapin.
18. Check your credit report. Visit www.AnnualCreditReport.com and you can receive a free copy of your credit report from all three major credit bureaus. Review each report carefully and insure that the information is correct. If there are incorrect or fraudulent entries, the credit bureau will tell you how to begin the process of removing the data that should not be there.
What can you add to this list of money management tips?