intentions are what New Yearís resolutions are all
about. Thereís the usual kind: Lose weight; quit
smoking; learn a new language; spend more time with the
then there are the money-minded, dollars-and-cents
resolutions. In a recent survey by Fidelity Investments,
39 percent of adults said that New Yearís resolutions
about money were easier to keep than most others.
top financial resolves: Save more money (54 percent),
pay off debt (24 percent), spend less (19 percent),
stick to a budget (12 percent) or reduce credit card
debt (8 percent).
more specifics, we asked some experts for their favorite
resolves for 2014:
ORGANIZED: Tackling the overload of financial paperwork
can be daunting. For some, itís simply a matter of
sorting it into file folders: Bills to Pay, 2014 Taxes,
Donation Receipts, Credit Card Statements. That way, itís
readily accessible, not stuffed in a drawer or piled on
your kitchen counter.
in a home office is one of the biggest challenges,"
said Grace Bamlett, owner of Organized Outcomes in
Orangevale, Calif. She recommends creating 12 file
folders for monthly bills, labeling them January through
December. The following year, when the first January
bill goes in, you can shred the old one, unless itís
needed for taxes.
those who like visual cues, she suggests buying colored
files: Purple for bills, blue for health insurance,
green for investments, etc.
a "good quality" filing cabinet, she said, not
a cheap version thatís apt to jam, break or tip over.
And donít get hung up on formal labels. "Make
your files speak to you: Use labels like ĎStupid Stuff
I Gotta Do,í " if that works.
also a good time to start gathering your 2013 tax
paperwork, everything from last yearís charitable
donations to childcare deductions. Sorting it now can
save a lot of last-minute scrambling ahead of the April
15 tax-filing deadline. And further eliminate the paper
mountain by shredding old utility bills and credit card
statements once youíve cleared them with your monthly
or end-of-year statement.
INVESTMENTS: If youíve got multiple bank and
investment accounts scattered among different financial
institutions, nowís the time to consolidate them, says
Jane Bryant Quinn, a longtime personal-finance columnist
and author who writes for AARPís monthly magazine.
"Everyone is better off if they simplify their
financial lives," Quinn said in an email. She
suggests making a list of all your accounts: annuities,
mutual funds, bank accounts, insurance policies,
you have a couple of IRAs, roll them into one. If you
have a handful of checking, savings or money-market
accounts, consider putting them under one roof.
benefits are many: First, you can avoid fees by having
multiple accounts at the same bank or financial
institution. It can also save you ó or your heirs ó
from having to locate lost accounts. "Tons of money
is sent to the states every year because people forget
bank accounts they left behind," noted Quinn.
"If youíve hung on to a checking or savings
account because itís a pain to move, Iím speaking to
with simplifying your stock and mutual fund accounts. In
general, Quinn said, experienced investors gravitate to
mutual funds, rather than lots of individual stocks.
Even with the marketís blockbuster success last year,
you can get stuck with duds.
your losers, Quinn said. "Any time is a good time
to get rid of the dogs. I wish I had a dollar for every
widow who thought her husband was an investment genius,
then opened what he left and found a lot of crazy stocks
he could never admit to. If he sold (the dogs), heíd
have harvested tax-deductible losses and (could have)
reinvested in something smarter, like a well-diversified
Quinn recommends owning a handful of diversified,
low-cost index funds: a broad U.S. fund, a small-company
fund, an international fund and an intermediate-term
bond fund. Spread your money among them as you see fit.
look for low-fee funds. Paying 2 percent on a $250,000
mutual fund portfolio "is like writing a check for
$5,000 every year," plus more if itís bought
through an investment adviser, said Quinn. "With
index funds, you could pay $60 or less."
TECH TOOLS: Maybe this is the year to try one of the
personal finance online tools, like Mint.com or
Manilla.com, which help organize your financial life by
tracking your spending/saving, monitoring your accounts,
setting financial goals. Theyíre also free. A new
entrant is Finovera.com, whose money tools include
alerts when a credit card charge is duplicated or your
utility bill seems unusually high.
consider signing up with your bank or credit union for
email or text alerts when an account is running low or a
bill is coming due.
YOUR PENNIES: Not literally, of course. But if youíve
never tracked your daily spending, it can be an
eye-opener. Write down all of your spending for two
weeks, from your morning coffee to fast-food drive-thrus
to weekend movies with the kids, said Jana Castanon,
spokeswoman for Apprisen, a Columbus, Ohio-based network
of consumer credit counseling centers.
two weeks? "Any longer than that, people lose
interest. Itís to figure out where youíre
nickel-and-dime-ing yourself. Ö After two weeks, youíll
have a general idea of your spending patterns and can
see where you can cut back."
tried it herself a couple years ago and discovered she
was "a Starbucks-aholic," spending $3 or more
on daily coffees that unknowingly added up. "Most
of our frivolous spending is mindless spending thatís
part of our routine," like a $70-a-month Starbucks
habit, she said. When casually swiping a debit card for
a soda and bag of chips at a convenience store, "it
doesnít even dawn on you that it might add up to
hundreds of dollars a month ó that you donít even
know youíre spending."
youíve identified your money leaks, try switching to
cash. In other words, donít cut off your weekly
coffee, but limit yourself to fewer a week or a fixed
UP RETIREMENT: Increase what youíre socking away for
retirement. If your company offers a match for your
401(k) contribution, be sure youíre putting in enough
to hit that match, which is essentially free money. Or
simply boost your current retirement contribution by 1
percent, especially if you got a pay raise. "If you
have it taken automatically out of your paycheck, youíre
not gonna miss it," Castanon said.
in their 20s and 30s, who are juggling rent, school
loans, mortgages and/or kids, may feel itís too hard
to set aside something extra each month for a far-off
retirement, or even an emergency savings account for the
unexpected ó car repairs, medical emergencies, etc.
But start the savings habit now, she said, no matter how
modest. "If you readjust your spending, you can put
a little bit away. Start small," she said. Even itís
only $5 a paycheck or $20 a month, start putting
something into a retirement fund or an emergency savings
TINY SUCCESSES: Too often, ambitious goals ó lose 50
pounds, learn to speak fluent French ó can be
overwhelming, setting us up for certain failure.
Instead, start with "baby steps," says
Apprisenís Castanon. Do the little things. Donít
say, "Iím gonna save $150 a month." Rather,
start by not eating out for lunch one day a week.
"Once you have that success (saving $10-$12 a
week), start building on it."
all, stay positive. "We often get to the end of the
year and start thinking about the things we didnít
do," the former credit counselor said. Instead,
celebrate your successes. "They may not be triumphs
or the goals we wanted. But if you took some steps to
get there, celebrate those."