Money, money, money … until we figure out a way to live without it, we have to figure out how to manage it.
The statistics are not good when it comes to American finances. Most of us don’t have diddly-squat in our retirement accounts or our savings accounts either. Yet you don’t have to keep on being broke. In 2012, you have the chance to restart your financial future by following some smart money goals throughout the year. By next December, your finances and your future could be completely different.
The first step is to take an inventory of your financial life. What is your income, and what are your debts? Who owes you money, or who do you need to get paid back? It’s hard to be a smart planner if you’re only looking at part of the truth, so get it all out into the open and down on paper.
Try not to forget about things like online subscriptions, auto-debits, or recurring payment plans. You need a real picture of where those dollars are going so that you can get them under control. Make it a whole family project, too, so that closet spenders or hoarders are out in the open and everyone can participate in making 2012 a smart money year.
Get Your Financial House in Order
Along with taking inventory, make 2012 the year you get your financial house in order. This means no more neglected checkbook registers or forgotten bills. No more lost safety deposit box keys or mystery PINs at the bank. Bring everything together, write things down, and start making sense of it all.
Go through and sort records, putting like items together. Pull out junk documents and advertisements so that you are just keeping monthly or annual statements, business reports, and other important records like sales documents or titles. Get a list of important numbers together for banking or credit card emergencies, and make sure the key people in your life know where this list is kept.
Make copies of critical documents and keep them in a place where you can access them quickly in an emergency. Organize a financial filing system at home, and shred sensitive documents that are no longer needed. All in all, the plan is that this year will be the year you know where everything is and what it means.
Build Your Rainy Day Fund
One of the most important financial assets you can have is a rainy day fund. Most people don’t have one, since Americans increasingly live paycheck to paycheck. Nearly 50 percent of us are financially fragile … just one $2000 emergency away from total financial obliteration.
Why have that stress hanging over you? Start now to save a rainy day fund equal to one month of expenses plus bills. Save it up as spare change in a piggy bank if you have to, but don’t delay in building up some kind of a financial cushion.
Tackle Debt and Savings Goals
After putting together a plan for a rainy day fund, turn to your other savings and debt management goals. Obviously, the best plan is to get out of debt as soon as possible so that you free up your financial options and increase your personal freedom. When the debt is gone, you can save funds for retirement, another house, putting in a solar system, or any other critical personal needs you want money for in the future.
Don’t be afraid to take small steps or make extreme changes. Declare bankruptcy if that’s what needs to happen. Cancel the cable and put the money into silver or gold. The key is not to wait around – get moving now so that 2012 can be a turning point for you financially.
Change One Bad Habit For Good
Last but not least, change one bad financial habit for a good one. For example, start tracking your checkbook balance so that you don’t get hit with any more bounced check fees this year. Or quit carrying around cash if you find that it just burns a hole in your pocket.
Swapping a bad behavior for a better one will pay dividends in 2012 and beyond. Benjamin Franklin was constantly improving himself one habit at a time – and if it’s good enough for a smart man like Ben, it can be good enough for you. Choose your worst financial habit and identify what you will do instead now so that you can get the switch made before the end of January.
You can make 2012 financially great. By taking inventory of your finances, putting your house in order, building a rainy day fund, working on your goals, and changing your habits you can have a totally different financial outlook by the end of the year. Even if you can only accomplish one of these goals, it will be forward progress. Why wait?
©2012 Off the Grid News