Let’s face it, 2011 was a hard year for just about everyone – especially those of us forced into unexpected caregiver roles or faced with the challenge of dealing with two sets of financials. The economy didn’t quite bounce back as many of us had hoped, the job market was still rough for most, and retirement accounts didn’t grow as fast as our eyes wanted. We can all sit around and whine, or we can be grateful for the fresh start that comes with the New Year. Regardless of your new goals for 2012 – whether it’s to increase earning power, save more money, or manage what you and your loved ones do have more effectively – here are four tips to help put you in a new direction in 2012.
Pay Attention to Credit – Avoiding debt and credit cards altogether means you’re not building a strong credit history, which makes it hard to get a loan when it is needed. If you plan to pay off a balance on a credit card each month, choose a credit card that will give you reward points. If you must carry a balance, choose a card with the lowest interest rate to avoid heavy monthly fees. Pick a card that will suit you and your situation best, and stop using the ones that don’t. If possible, avoid closing any accounts; this can hurt your credit score. And speaking of credit scores, make it a goal to improve yours this year by making steady, on-time payments every month and keeping all of your accounts in good standing. Check your credit score annually for free at www.annualcreditreport.com; you will not only find out your score, but you can also make sure there is no evidence of identity theft.
Save Money – In this economy, nothing seems certain. Having a cushion can help tremendously if you should lose your job, have an unexpected large expense related to your car or health, or if your life suddenly shifts into a caregiver role – which might require travel or an unforeseen move. Make saving automatic by signing up for monthly transfers that go direct from your checking to your savings account. You can even transfer funds directly from your paycheck to your savings so you won’t ever miss the money. Have a back-up plan or plan B for all the possible scenarios that could transpire over the next couple of years – it may provide more peace of mind for you and your loved ones.
Cut Expenses – We don’t always recognize the areas of our lives where we can make simple cuts or changes that can add up to hundreds of dollars a year. Small things like closing doors to unused rooms, turning off the air conditioning during the day, unplugging appliances when not in use, installing a programmable thermostat, clipping the weekly coupons from the paper, cooking more at home instead of calling for take-out, and purchasing less food more frequently at the store to cut down on the amount of food wasted are just a few examples. There are a host of cost-cutting measures that can be taken, like cleaning out that storage unit or getting rid of the cable and watching television for free on sites like Hulu.com, iTunes or network websites. You’d be suprised at how you don’t really miss what you thought you couldn’t live without. Consider those times in which you might normally hire someone to fix something in your home as a DIY project to save money. You’ll be amazed at all the ‘how to’ videos, books, and articles you can find to help you fix your toilet, spray for bugs, or install a ceiling fan. Furthermore, most large hardware stores even have weekend classes to teach you how to install tile or hardwood floors to save on installation costs. You could even consider ‘crafting’ things like scrapbooks, candles, or soaps to give as gifts instead of spending large amounts of money at retail stores. Besides, thoughtful gifts are often appreciated and cherished more.
Increase Income – You don’t have to work at a fast food restaurant to earn a few extra dollars, and if you are placed in the caregiver role, extra time to earn money could be difficult to come by. However, sometimes we don’t recognize the valuable skills we have that others might be willing to pay for, like editing, gardening, fixing up cars, event planning, or teaching a second language — things that might not ‘feel’ like a side job to us. Earning just a few extra Benjamins a month can help you reach that savings goal, get you back on your feet, or help pay for that much needed weekend away. Who knows – what was temporary at first could blossom into something lucrative and long term.
Remember, focusing on the ‘why’ behind a goal can improve the successful completion of the goal. As things shift and change over the year, it’s easier to adjust the course of action when you know the motivation behind the goal instead of just the ‘how’ tactics for achieving the goal. It’s also important to think about your relationship with money: how have you spent and saved it over the years? Are you an emotional, spontaneous spender, or do you cling to it as if it was the single strand of rope holding you on a mountain top? Realizing and addressing your habits with money can certainly help you avoid pitfalls.
Research & Community Education