A fresh year on the calendar or not, resolutions are hard to keep. Whether the target weakness is overeating, undersweating, or overspending, temptation is everywhere and old habits die hard. But if you want to make some positive changes to your bottom line in 2009, here’s some good news: When it comes to your financial fitness, some small changes can yield amazing results. Here are five examples:
1. Up your 401(k) contribution by 1%.
As you get older (and hopefully earn more money), you want to contribute as much as you can to a 401(k) retirement savings plan (up to the maximum allowed by law). If you already contribute to a 401(k), tell our human resources manager that you’d like to increase your 401(k) contributions by 1% (or more if you’re feeling aggressive). Chances are, you won’t miss that money now, but it will have the chance to earn compound interest for 30 years or more. If you do this every year, soon you could be saving $10,000 a year for retirement without even realizing it! Don’t have an employer-sponsored retirement account? Or any retirement account for that matter? Resolve to open a Roth IRA and stash away at least $25 a month.
2. Cut up a credit card.
According to the credit bureau Experian, one in seven Americans carries at least ten credit cards. Ten! Got more than two credit cards? Cut one up. Choose the card that you’ve had the shortest amount of time or the one with the lowest credit limit when compared to your other accounts. Don’t cancel the card (doing so might unnecessarily lower your credit score), but do make sure it’s impossible to use it. Even if you already spend responsibly, why tempt yourself?
3. Stop paying fees.
Those pesky fees are everywhere. Whether they are late payment fees, overdraft fees—or the most common of all—ATM fees, resolve to do everything you can to stop paying them! If you paid more than a couple late fees or overdraft fees last year, it’s time to take a hard look at why; they indicate other financial problems. To avoid ATM fees, load up on cash less frequently or get cash back when you hit up the grocery store.
4. Buy big things used.
The next time you make a purchase over $50, ask yourself: Can I find this on Craigslist or eBay? With tough times hitting all over, chances are more people than ever are flocking to online marketplaces to unload some unused goods for some extra cash. And for you, that spells savings.
5. Make a plan, if not a budget.
I know how hard budgeting is. I actually enjoy the act of budgeting—but I still fail to be religious about it because there are so many other darned things to do! Still, even if you can’t account for every penny you spend; at least spend a half hour a month estimating how much you will earn and spend that month. Even having a vague idea of how much you can spend without going over budget is better than no idea at all.
The first half of 2009 does not look easy, but unlike some, I am optimistic that at this time next year this recession will be a memory. In the meantime, we can all practice doing with a little bit less and planning a little bit harder for the future. Whatever your 2009 financial resolutions…good luck!