5 Personal Finance Resolutions for 2013

The first day of the new year has finally arrived. Good intentions and wishes coming from all you see. Everyone wants to make this a really great year. Many people are making resolutions to improve their lives and lifestyles. I am not a fitness person but many in my home use a gym almost daily. I am hearing their stories of how packed the gym was today. Many have made resolutions to get into better health and lose some weight, a very good idea. But alas we all know that 80 percent of them will quit by the end of the month and the rest will quit by the end of February.

It’s hard to make changes in your life, especially exercise related. But out of all those who at least tried a small percentage will tough it out the first few months and continue on. Not only will the hard work help them lose some weight but also lead healthier lives.

Leading a better life also has a lot to do with your financial life. According to Money Magazine, more than half of all Americans have their financial lives in a total mess. These financially unhealthy people have no savings and live paycheck to paycheck. They save nothing for retirement, emergencies, or have any financial plan.

With the new year just starting isn’t it time to make a change and not just for a couple of months. Changing financial habits is even more difficult than changing exercise habits. Many people making mistakes with money feel trapped and live in a constant boom bust cycle. They feel there is no way out. They feel trapped.

The following bad financial habits are common to all of us. As we all are on different places in our financial journey some of these may not be a problem in your life at this time because may have conquered them. But I think you will be able to find one that does apply to you.

Impulse Spending

This is one of the toughest problems people have with their money. There are just so many brite and shiny things out here to buy and you know you need them all. You wonder why it is so difficult to say no to these things. It’s partially not your fault because companies pay advertiser millions of dollars every year to make these items very tempting. They hire psychologists and educated people to make these items so enticing you buy them without thinking. Knowing that you need to find the trigger points in your life that cause this problem.

This impulse spending only makes a poor financial situation worse. Find these situations that cause you to impulse shop. It may be a particular store you go to. You may use shopping as entertainment. People go to the mall or stores as a pass time. Change these habits and get yourself a new hobby.

On line shopping is another way we impulse spend. You receive email and text messages from your favorite stores tempting you to spend more money. Cancel those distractions. Get something to do off-line. Every page you read online has ads to by things. Shut off you computer and read a book.

Focus on Reducing your Debt.

Your credit card bills and other debts are the biggest thing keeping you from becoming successful with money. Your either overspending or spending incorrectly. Don’t you wish you were able to keep those monthly payments in your checking account. Use any cash you can get your hands on and pay down those debts. Start with the smallest one. Throw all you can at this one till it’s paid off. Pay the minimums on the others. If you can take on another job, start a home business, or maybe sell some things on Ebay. Getting out of debt completely is a goal you should have.

Reduce the Credit Cards You Carry.

I have seen some people’s wallets in my time and they carry so many credit cards, I don’t know how they keep track. A good goal for the new year is to reduce this plastic mess to just have one debit and one credit card. Take all the others out of your wallet or purse. You don’t have to cancel the accounts, just put them all someplace safe in case you need them. Learn to just use your debit card for purchases and you credit card for emergencies. You will have less checks to write every month and it keeps everything a lot simple.

Emergency Fund

If you don’t have one, your way over do. Grandma’s rainy day fund was something that kept everyone afloat when trouble came. It’s a lost art because we have fallen back on using a credit card for emergencies. The easy use of credit cards have turned around one the best ideas in finance. The country is in credit card debt because of the loss of this great tradition. Instead of reaching into the piggy bank to fix that broken hot water heater, we just charge it. It’s time to go back to a better way.

Start your emergency fund by putting $20 in an account or even into an old jelly jar. Promise to put another $20 every pay-day. Try to increase the amount you put in as time goes on. Before you know it your going to have $500 and then $1,000 in there. The way to make it all work is to not cheat. Don’t be dipping in there for a pizza. Put the money somewhere hard to get at so at least you have half a chance to accomplish this.

Now when the hot water heater leaks or the car breaks down you will have the money to make it right. You don’t have to use you credit cards. You have it covered. After, you return to filling the emergency fund back up. It’s a habit you need to have.

Learn Something about Money.

When you learn something you didn’t know before you feel empowered. There is much to learn in the personal finance space. Anything from investing to mortgages and many more topics are available to you. Go to websites like Investopedia.com and search on some topics of interest. We all have a general idea of how money works but what you really need to learn about is investing. We all need to be saving money and knowing what investment vehicles are available to you is important.

Also many books are available to us that teach a basic understanding of your investment choices. Many of the money gurus like Dave Ramsey and Suze Orman answer many of the basic questions you may have.

Making resolutions and changing old habits are never easy. You will have a lot of false starts or you may get bored and quit like the bunch in the gym. But out of all these tips, maybe just chose one and work hard on it. You can change.