Prodigious Financial Tips for 2012

Set financial goals that you know you will be able to achieve. Make a promise to yourself that every year you will do at least one thing to become a better person which including becoming better at managing your finances.

Finances can destroy relationships; result in divorce, arguments, sadness, depression, anxiety and fear. Finances can be used to generate wealth or can be used to generate debt. Finances have to be properly managed.

If you don't meet all of your goals by the end of the year develop smaller goals that can be easily achieved. Once you achieve those, develop larger goals and develop a course of action to achieve them. Track your progress.

Make sure your goals are positive statements that will improve your life. A goal should be similar to an affirmation, i.e. I will pay off my Visa bill by March 2012 instead of an uncertain or negative goal such as, I hope I can pay off my Visa bill by March 2012 or I will try to pay off my Visa bill by March 2012.

Eradicate those bad spending habits. The best way to change your financial habits is to create a checklist of what you what to accomplish regarding your finances. Here are 15 prodigious financial tips to improve your finances in 2012.

1. Change Your Mindset. Change the way you think about money. If you are determined to get out of debt and believe you will get out of debt, you will. Throw away bad spending habits and recycle good ones that have been successful in helping you, your family and others.
2. Set financial goals for the year. Plan how to accomplish each financial goal. Identify what is required to accomplish each goal.
3. Make adjustments. Make necessary lifestyle adjustments to help reach your financial goals.
4. Get insured. Make sure you have adequate health, auto, life, disability and business insurance.
5. Save Money. Create an emergency fund with enough money to cover at least 9-12 months’ worth of monthly expenses. This will prevent you from getting into debt.
6. Get Out of Debt. Get current on any late payments. Negotiate with creditors to setup payment plans and pay off old debts. This will help increase your credit score.
7. Trim Spending. Don’t spend more than you earn. Buy needs more often than wants. Find ways to reduce expenses. Reduce spending by 30-50% each month.
8. Limit Credit Card Usage. Use your credit card for emergencies only and avoid using your credit card regular purchases such as groceries and gas. Keep credit card balances at 20% or less of the credit limit. Pay balances off at the end of each month.
9. Develop a Financial Plan (Budget). Write a list of your entire total monthly expenses including debt and write down your total monthly income after taxes. If you have any money left over use that to pay down your debts. If you do not have any money left over (at least 10% of your monthly income) look at the areas where you can reduce spending.
10. Develop What If Scenarios. List different scenarios that could happen and how you would deal with each one, i.e. job loss, sickness, death, new baby, loss of health insurance or other benefits, car repair, etc.
11. Have a Backup Plan. Have a Plan A, B, C, D and E. Many people never plan for the unexpected. Always have multiple options to solve a problem or deal with a crisis.
12. Go past retirement. Don't just plan for your retirement, plan for your children's retirement. Sometimes when planning for retirement retirees do not save enough money to cover all of their monthly expenses and end up going back to work after retirement. If you plan for your children's retirement or your grandchildren's college education this will ensure you have more than enough money to retire and enjoy your golden years.
13. Do better than your parents. If you parents retired at 65 or had to work until they were 70 and had nothing to show for it, do better than your parents. If you retire at 55 be sure you have enough money to live on for at least 20 years.
14. Consult a professional. Contact a financial advisor or financial planner to help you determine and achieve your financial goals, where you want to live, the age you want to retire and the lifestyle you would like to have when you retire.