Financial Habits to Kick in 2011…
January 11th, 2011
Andover, Massachusetts January 11th, 2011 – Have you made your New Years resolutions yet? Have you had success in the past when making a New Years resolution? Well, if you have been following my blog at all over the past year, I hope you made some New Years resolutions that involve your finances. If not, check out the list below and eliminate some of your poor financial habits once and for all.
- Ignoring Your Cash Flow. Cash flow is one of the most important metrics that you should be keeping track of on a monthly basis. Knowing how much money is flowing in and how much is flowing out is just the first step. Once you know the numbers, figure out where it is going, the more you know about your cash flow, the more you can do to improve your financial situation.
- Making Impulse Purchases. This is a common topic that many personal finance blogs discuss. Basically it comes down to you having the inner strength to not purchase items on a whim. If it’s a larger purchase, sleep on it to make sure you need it. For smaller items such as day to day snacks etc., I recommend not evening carrying cash around or entering stores where you know money can be spent very easily and quickly.
- Using Credit Cards for Purchases You Can’t Afford. This should be the number one rule for everyone entering 2011. Credit Cards have allowed the majority of Americans to live a lifestyle that they otherwise could not afford. Make sure that in 2011 you use credit cards for their convenience and rewards programs, not to live a life that you know you can’t afford.
- Forgetting an Emergency Fund. These have picked up in popularity over the past 2 years as many people who never planned for a loss of income were faced with long term unemployment. Make sure that in 2011 you set aside at least a few months worth of living expenses in a liquid savings account so that just in case an emergency pops up (job loss, accidents, health problems), you will be prepared and wont have to worry about the financial consequences of whatever emergency you face.
- Procrastinating Saving for Retirement. This is the number one thing everyone can do in 2011 to improve their retirement years. The sooner you start the better and there is no such thing as too late to start. Put away as much as you can afford each year if you are nearing retirement. If you are just starting out, anywhere from 10-20% of your gross income is a great way to start preparing for retirement.
- Turning Down Employer Contributions to your 401(k). This is basically turning away free money. Not only does this encourage you to save, but if your employer matches it, you are doubling your investment up to a certain percentage limit. Always invest at least enough to take advantage of the employer match on your retirement account.
Readers, is personal finance an area you will be focusing on in 2011? What sort of information are you looking for to help your finances this year?
