{ new year, new you - finances }

Here are some ways to kick off the new year with getting your act together financially.

1) Talk about it. Carve out some quiet time with your partner and talk about where you're at financially (have current account statements & information ready) and talk about what your goals are for 2009 and beyond. Get on the SAME PAGE. Will & I listed out 10 financial goals for the new year in addition to our personal and business goals. Some are more important to ME (finally, dear god, pay off my grad school loans) and some are more important to him (beef up emergency fund) but by combining our goals into family financial goals, they all become important to both of us. It's important to take a clear, honest look at where you are today. Not sure where to start? Here are two great financial goals worksheets - one from Savvy Sugar and one from ING.

2) List it out. Now, make a list of your 5-10 financial goals for 2009 & beyond with action steps. Post them in a prominent place (eg. above your desks, on a kitchen bulletin board, etc.) where you can be reminded about them everyday! We wrote out 2009, 1010, 2016, 2019 goals. So 1, 2, 5 & 10 year goals and action steps. Later this week, I'll share some of our financial goals.

3) Look at ways to trim your budget/spending plan. And if you don't have a budget, start using one. We have ours on Quickbooks and on a shared google doc but I know lots of people love Pear Budget and Mint. Make sure you track what you are spending. Make sure you have an emergency fund for those unexpected emergencies and make sure you plan for some fun each month! Here are some great tips on ways to learn to live with less.

4) Get your finances organized. Create a financial organization system either using online tools or a folder system. We use pageonce to have all of our accounts in one place online and Quickbooks for our personal and business finances and then I have a folder system with my goals tacked to the front and individual file folders for school loans; IRA's; real estate investments; bank accounts; general financial information; credit card statements & contact information; etc.

Here are some suggestions from David Bach for a financial file system.
  1. Tax Returns-Include 8 folders for the last seven years plus the current year. Place all W2’s, 1099’s, interest statements and returns in this file.
  2. Retirement Accounts-Create a folder for each retirement account you have, 401(k)’s, IRA’s, etc and include the statements.
  3. Social Security-Include your social security benefits statement.
  4. Investment Accounts-Create folders for each brokerage account, mutual funds, or individual stocks and keep the statements here.
  5. Savings and Checking Accounts-Add files for each separate account you have.
  6. Household Accounts-Here you will keep track of your House title, home improvement receipts, mortgage and utility statements.
  7. Credit Card Debt-Add a folder for each card you hold.
  8. Other Liabilities-This folder would include student loans, personal loans, car loans, etc.
  9. Insurance-This folder contains all insurance policies, home, life, car, health, disability, long-term care.
  10. Will or Trust-Keep a copy of your will and living trust here.
  11. Children’s Accounts-Include any college savings plans or trusts set up in your child’s name.
5) Make saving a habit. Find ways to be more thrifty & frugal this year. Here are some great tips.

6) Learn more. Add some financial blogs to your google reader and check out some financial books from the library to continue your financial education and your motivation towards your financial goals. You can download Suze Orman's new book for FREE for the next few days at Oprah's website.

Some financial blogs I like:
Simple Mom's Money Management Series
Get Rich Slowly
Fabulous Financials
Prime Time Money
Millionaire Mommy Next Door
No Debt Plan
Boston Gal's Open Wallet

7) Figure out how much things down the road will cost and start saving NOW. We really want to be able to retire early...using a variety of online calculators we figured out how much we would need per year (retired) and how much we need in the bank/invested by the time we want to retire to be able to live off the dividends. This was a very MOTIVATING exercise to both of us. We also need to get our groove on for saving to help send the kids to college. By the time our kids will be in colles, 4 years of tuition at a public college will cost $100,000 +! Ouch. I had no clue. So, to get there, we need to save approximately $4,000/year for the next 13-17 years to make this happen.

8) Reward yourself for working hard on your finances! What is it you want to save for? A family trip? A day at the spa? Plan and save for FUN!

What are your financial goals for the New Year?


Whatever Dee-Dee wants said...

Those are some great ideas! Now I am motivated to get budgeting.

Anonymous said...

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Rachel said...

Thanks for this. I hate talking about money cause we never have any!! Would love to hear how people save on groceries!

Thanks for the link love in the previous post.

How's it going with the new baby?

Mark Salinas said...

Fantastic! I needed this!

Tabitha Blue said...

Oh great list and great ideas!! Thanks!!!!! I'll definitely have to come back by!