13 Financial Tips for 2013

Everyone makes resolutions for the New Year or make promises that they hope to keep.  However, I rarely hear people make resolutions about their finances. I am sure they are tons of people that do, I just never hear about it. I didn’t make any resolutions this New Year.  I made goals for myself which I do every year and set a target date for each one.  

Each year should be used an opportunity to correct any past mistakes, learn something new and make improvements in at least one area of your life.  Finances affects a large aspect of everyone’s life and should be given more attention.  Finances should be reviewed at least once a month.  If you are not good with your finances, consult a professional to help you map out financial goals and plan for retirement.  Here are 13 financial tips to help you improve your finances in 2013.

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 or others.
2. Set financial goals for the year.  Plan how to accomplish each financial goal. Identify what is required to accomplish each goal, write it down and follow the plan.
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, homeowners’ and business insurance.
5. Save Money. Create an emergency fund with enough money to cover at least 9-12 months’ worth of monthly bills. 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%.
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. If you don’t have a plan, create one to address each possible scenario.
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.