Resolve to Control Your Finances in 2012

Nearly three-fourths of Americans were expected to make at least one money-related New Year’s resolution, according to a survey from TD Ameritrade.  Were you one of them?

New Year’s resolutions are notorious for being broken months, weeks or even days after they were made. Only one out of every five people who make these goals push ahead to achieve them, according to research from the University of Minnesota.

If you haven’t made your resolutions yet, or if you need some inspiration to stick with them, here are 12 ideas to get you started. I recommend picking three to five that make the most sense for you.

1. Control overspending. Credit cards are so convenient that they make it easy to overspend on non-essentials. Try using cash only for 21 days and track how much you spend. You might be surprised by the difference. 

2. Stick to a budget. No matter how much you make, you should know exactly where your money is going and where you can make improvements. Free budgeting tools are available online. 

3. Pay off debt. If you have any kind of debt, develop a strategy for paying it down. You can start by paying the debt with the highest interest rate first and make your way down the ladder, ensuring you make the minimum payments on other credit cards and loans. If you feel like you need to experience small wins along the way to keep you motivated, you can pay off the smallest balance first and move up to the next-largest. 

4. Manage your credit. Having good credit is essential to getting the best interest rates and terms for credit cards, home loans and auto loans. Check your credit report at least twice a year to make sure everything is accurate.  

5. Improve your credit score. If your score is less than perfect, make a concerted effort to improve it. It is important to raise your credit score before you need to, because boosting your score takes time. 

6. Save by paying yourself first. You should save before you spend. The best way is to set up direct deposit from your paycheck to a savings account, if you haven’t already. Making it automatic removes the temptation to spend that money. View your savings as a bill you need to pay like any other. 

7. Save even more. If you’re already putting away some money each month into savings, that’s great. This year, find a way to save even more. Cut unnecessary expenses to help accomplish this goal. 

8. Save for retirement. Direct deposit also works in this case. Automatically put a portion of your paycheck into a 401(k) or IRA. Take advantage of the full employer match for retirement contributions if your employer offers one.  

9. Conduct an insurance review. Perform an annual insurance review to make sure you’re not paying for coverage you don’t need and that you’re fully covered in the areas you need. If you had any major life changes in 2011, you’ll want to make sure everything is updated in 2012. 

10. Protect your identity. Monitor your credit on a regular basis and check your other financial accounts to make sure everything is in order. If you see signs of fraudulent activity, alert your bank or credit card company. 

11. Get organized for tax season. Talk to your tax preparer sooner rather than later to avoid the mid-April crush. Start gathering receipts and other documents that you know you’ll need to complete the forms. 

12. Evaluate your current banking services. Be sure you’re taking advantage of the time-saving tools available to you through your bank. For example, online banking can help you chart your expenses and get an overview of your financial situation, and mobile banking can help you monitor accounts on the go. 

You can reach Jo Ann Fann at 931-680-2207 or by email at joann.fann@pnfp.com.