By Gregory Karp
You’ve read all the New Year’s resolution money-advice articles with their suggestions, sometimes trite, “Skip your morning coffee and save a fortune!” and sometimes vague, “Spend less than you make!”
Gee, thanks for that.
Sometimes you just need useful, specific suggestions to get a money task done, cross it off your list and get on with your life.
Minding their money was a top New Year’s resolution, even above weight loss, for people in a recent survey by Charles Schwab. Three of four people ranked “get your finances in check” as their first or second choice, compared with losing weight, getting a new job or volunteering more.
And a recent survey from the National Endowment for Financial Education found 64 percent of U.S. adults will make a financially focused goal in 2015.
But in making those goals, you should be specific and create individual tasks so it doesn’t all seem so overwhelming.
And where do you get the money to fund these goals? Most can be paid for little by little over time. But many people will soon be getting a windfall, a refund from the IRS, which last year averaged around $3,000.
Here are money tasks to do this week that will help 2015 be more prosperous. Most can be done in about an hour.
Focus on what thrills you. Everyone should think about saving money but not on the same things. Stop wasting money on what you don’t care about so you can direct that cash to what thrills you. When it comes to discretionary money, buy less stuff and more experiences with other people. You’ll be happier. Identify at least one spending cut that will pay for an experience you will remember for years.
To help match financial decisions to your personal values, take the LifeValues quiz at smartaboutmoney.org by the National Endowment for Financial Education.
Join a credit union. Or consider whether a small bank or online bank can serve your needs with fewer fees and lower loan rates than the megabanks charge. It can be worth the short-term hassle of changing over your accounts. Resources: asmarterchoice.org, mycreditunion.gov, culookup.com, findabetterbank.com, bankrate.com, mybanktracker.com.
Get out of debt. You can’t dig your way out of debt in an hour, but you can develop a specific plan. Two schools of thought: pay off debts from highest interest rate to lowest to save money on finance charges, while paying minimums on all of them. Or pay debts smallest to largest to build debt-busting momentum. Creating and executing a plan is more important than the method. In a survey by Quizzle.com, more than half of respondents, 52 percent, said paying down debt was one of their financial resolutions.
Choose a better credit card. The Financial Industry Regulatory Authority says 61 percent of consumers don’t shop for their credit cards. Get a card that fits your needs better, whether a low interest rate, better rewards or valuable card features, such as extended manufacturer warranties or no foreign transaction fees. Fortunately, a number of websites can help you choose. Use several to get multiple “opinions” on the best card for you. Resources: cardhub.com, nerdwallet.com, creditcards.com, cardratings.com, creditcardtuneup.com.
Start a college fund. Have school-age kids? Go to your state’s college savings website and open a 529 college savings account and set up a recurring contribution, even if it’s $25 a month. Select an age-based plan as the investment option. Later, you can worry about transferring the money to a different state’s plan that’s slightly better, you can use any state’s plan. But for now, just get an account open for each child. Resources: savingforcollege.com, collegesavings.org.
Start an emergency fund. Only 38 percent of Americans have enough money in their savings accounts to pay for unexpected expenses such as a $1,000 emergency room visit or a $500 car repair, according to Bankrate.com. And about 56 percent of Americans do not have a rainy day fund at all, according to the Financial Industry Regulatory Authority’s National Financial Capability Study. An emergency fund not only helps pay for life’s unexpected costs, but allows you to save money. For example, you could say no to extended warranties because you have the cash to pay for a repair. Or, you could raise deductibles on insurance and pay lower premiums. Set up a separate bank or credit union account to squirrel away rainy day cash. “With emergency savings, set a small goal like $500 dollars to show yourself that you can actually achieve that goal, then set the bar higher,” said Paul Golden, spokesman for the National Endowment for Financial Education.
Review your wireless plan. Does your traditional wireless phone contract plan expire this year? Make sure you’re on the right plan for you. One hour of examining plans should give you a sense for whether you should switch. Resources: wirefly.com, ConsumerReports.org, myrateplan.com, whistleout.com.
Figure your worth. Calculate your net worth by adding up the value of everything you own and subtracting everything you owe. Is the result at least positive?
Raise your retirement contribution. Go online to your retirement account and raise your contribution. Shoot for at least 10 percent.
Get a will. Make an appointment this week with an estate-planning attorney to create a will, durable power of attorney and living will. Make sure all your financial accounts have primary and secondary beneficiaries listed.
Start an allowance system for kids. Whether allowance is tied to chores or not, establish a system to get kids thinking and handling money by themselves.
Cut the cord. This is the year many channels traditionally only available via cable or satellite, such as HBO and ESPN, will be available for streaming. Is this the year you can cut the cord from the cable company, or at least reduce it to Internet service only?
Get off catalog lists. Impulse shopping temptations can derail your other money goals. Get off junk mail lists at dmachoice.org. Hit the “unsubscribe” link at the bottom of retailer emails. Stop unwanted catalogs at catalogchoice.org.
Check your credit reports. Never got around to checking your credit reports to look for mistakes that could be costing you money? Take 15 minutes to finally do it at AnnualCreditReport.com.
Reshop insurance. Home, auto and life insurance premiums can vary widely for the exact same coverage. Shopping around is surprisingly likely to lead you to a better deal. Resources: accuquote, insurance.com, insweb.com.
Cook. An American family of four spends about $3,800 per year on dining out, according to the government’s Consumer Expenditure Survey. Dine out because you want to, not because you’re a lousy meal planner. Make a plan to cook at home and cook in batches to freeze meals for later. Grocery tip from Stephanie Nelson of CouponMom.com: “Change your shopping mentality: instead of buying items when you run out, watch for bargain prices on products you want and buy them when they are on sale.”
Get a number. When’s the last time you did any retirement planning? At least know what your nest-egg target is. Resources: choosetosave.org/ballpark, dinkytown.net, aarp.org.
ABOUT THE WRITER
Gregory Karp, the author of “Living Rich by Spending Smart,” writes for the Chicago Tribune