If you’re among the masses who are planning to make investing, saving or managing money a financial resolution, keep in mind these five tips that should help you succeed:
1. Set a well defined goal. For example, you may have a goal to start an emergency fund. Figure out how much it would take to pay your household necessities for three months or six months, whatever cushion you determine would give you peace of mind. Then start setting aside enough from each paycheck to reach your goal.
2. Budget for it. Allocate money every month to your financial resolutions, and trim expenses that may be keeping you from reaching your goals. Budgeting tools are available online. Mint.com offers a useful free tool at www.mint.com/budget.
3. Pay yourself first. Consider using automatic payroll deduction or a monthly deduction from your checking or savings account. View your savings as a bill that you need to pay like any other. Giving it a higher priority will ensure that it builds over time. Keep in mind an online savings account will limit your immediate access to funds so you won’t be as tempted to raid your savings for purposes other than your intended goal.
4. Keep your list short. Too many resolutions will lead to frustration and you’ll give up. A list of three to five goals can optimize your momentum.
5. Make it personal. Create a list by thinking about what worries you, the things that keep you up at night. Accomplishing these tasks will clearly remove some stress. Don’t just set a goal because it’s what you think you’re supposed to do. A goal can also be something that excites you, perhaps a European vacation or saving for a down payment on a house or a car.
It’s one thing to make a resolution about money, quite another to keep it. The TD Ameritrade survey showed 60 percent of resolution makers last year are resolution keepers.
One thing is clear in the current environment. People are determined not to get stuck in another economic downturn without enough knowledge to make informed decisions.
More than 80 percent of participants in a recent Fidelity Investments survey said they are likely to learn more about financial topics in 2010. The two most mentioned are setting financial goals and saving for retirement.
Perhaps most important, nearly 90 percent said the economic events of the past year will give them impetus to stick with their resolutions.
http://www.philly.com/philly/business/personal_finance/121609_financial_resolutions.html
Tags: 2010, consumer, economy, goals, saving money
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