New Year’s resolutions are made to help us kick bad habits, get healthier, etc. For most of us, getting fit financially is a top priority. We have listed a few things to help you get started.

The most important financial tip is to pay yourself first. By this we mean start making contributions to an IRA (Individual Retirement Account). Everyone should have an IRA. As long as you have earned income (in other words, you have a job), you qualify. If your spouse is employed and you are not, you qualify under your spouse. Strive to fully fund your IRA. For example, if you are over the age of 50 you can contribute $6,000.00 into your IRA. If you are under the age of 50, you may contribute $5,000.00. Contribute the maximum whatever your age.

Most employers offer 401(K) Retirement Plans. Many people do not sign up for these because they reduce take home pay. But the reality is you are not losing out by joining your employer’s 401(K) plan, you are simply taking some of your income now and investing it in your future. You are simply taking a buck now and multiplying it for later. Do not let what has happened on Wall Street deter you from joining a 401(K) plan. Most 401(K) plans have matched contributions from the employer. This is considered free money and free money is always good.

Another way to pay yourself is with CD’s (Certificate of Deposit). You can start with a six month or nine month Certificate of Deposit. When the CD matures, re-invest it in another CD. Everyone should have a basic savings account. You should strive to have six months salary in your savings account. A savings account comes in handy when the unexpected happens: you need new tires for your car, your 20-year old refrigerator is on its last leg, your spouse is laid off, you get laid off…any number of things can happen. It is always better to be pro-active than re-active.

Be sure to sign up for the Flexible Spending Account at work. This is a great way to reduce your tax burden and we all want to pay less taxes. Not sure what a Flexible Spending Account is. Real quick: if you purchase over the counter medicine, prescriptions, if you go to the doctor’s, if your children go to the doctor’s, if you pay for daycare you need to have a Flexible Spending Account. Let’s say your income is $40,000.00 per year. And you spend a total of $$60.00 ($3,120 for the year) for an after school program for your child. You also spend approximately $600 per year on co-pays, over the counter medicines (keep in mind most of us spend much more) your total would be $3,720.00. Instead of paying taxes on $40,000.00 you pay taxes on $36, 280.00. This could very well put you in a lower tax bracket. It is a win-win situation.

Every consumer wants to get out of debt and getting out of debt is always a New Year’s resolution. This year is no different. But, we can make it count this year, for starters, make a plan, write it down on paper. Get yourself a spiral notebook dedicated to your finances. Write your ‘Get Out Of Debt’ plan in your notebook. This is your year to get rid of Credit Card Debt. If you have 3 credit card bills, tackle one at a time. On the other two, negotiate with the credit card companies to lower your interest rate. If you have paid on time for a minimum of six months, they will lower the interest rate for you. If trying to get out of debt is too much for you to do alone, consider a non-profit credit counseling or budget planning services. Make sure the company you use is licensed by the State of New York Banking Dept. You can also contact the National Foundation for Consumer Counseling at 800-388-2227 for a referral.

Paying off debt may take you more than a year, but we guarantee if you start this year, it will make a difference. Ask yourself everyday: What can I do to get out of debt? Before you make a purchase (no matter how small) ask yourself: Is this purchase necessary? We, as consumers, must be able to check ourselves. No one is going to do it for us. If things are not getting better for you financially, whose fault is it?

Last, but not least. The only way to save money is to make more than you spend. If you do not earn enough to get yourself out of debt in 1 -2 years, consider starting a home-based business. Perhaps what you do on your full time job can be parlayed into a second income from home. For example, you may be a billing clerk full time. Doctors and dentists are always looking for someone to do their billing. Keep your full time job and start a home based billing service. Chances are you will make more money doing part time billing out of your home than you make on your full time job.

Everyone has something that they love to do, we suggest
that you turn it into a money maker. We must come to the realization that working for someone else is not going to make us rich. Check it out for yourself. When you go to work, look around. Look at your co-workers. Really look at them from head to toe. Do they look rich? Let’s make it easier, do they look well off? Now, look at your immediate supervisor. Does your immediate supervisor look as though they have it all together financially? If not, why are they your supervisor? Now, find someone who you know that is definitely well off or better yet, rich. Who do they work for? They probably work for themselves. We are not saying to quit your full time job, just start a part time business. Who knows, that part time business may be just the ticket you need.

To sum things up, this year we must begin to eliminate our debt and we must do at least 3 of the following:

1. Start an IRA.

2. Participate in our employer’s 401(k) plan.

3. Sign up for the Flexible Spending Plan at work.

4. Start a home-based business.

5. Start a basic savings account

6. Start purchasing CD’s (certificate of deposit).

Be sure to tune in to our radio broadcast, ‘Improving Your Credit Worthiness’ on WSIV 1540 AM every Wednesday 2 – 2:30pm. To schedule a workshop for your group or company please call James or Barbara Peterson at 315-446-4668