Nine More Steps to Better Finances

According to a Wall Street Journal article by Karen Blumenthal, most of us would like to save more, earn more and spend more wisely in 2010.  To help you do just that, Blumenthal put together a year’s worth of personal-finance suggestions, which I’ve summarized below.  She suggests you tie these activities to major holidays – I suggest you try one a month – or whatever works for you!  Even if you do just one of these things you will be better off!  The road to change begins with one tiny step.

• Save more. Take a few minutes to set up an automatic deduction from either your paycheck or your checking account to an online or a bank savings account. Or, increase your contribution to your 401(k) by one percentage point. Commit at least half of any raise you receive this year to savings as well.

• Get educated. Take an hour or two over a long weekend to study up on one financial issue that you’ve ignored. For example, look up the expenses embedded in the mutual funds in your 401(k) or calculate how much your debt is costing you.

• Prepare for new credit-card rules. In late February, the second phase of the Credit Card Act will kick in. To be prepared, look at your credit-card bills to memorize your due dates, which, by law, will be the same each month. Paying your bills on time is the most important factor in your creditworthiness.

• Get your annual credit report.  Take advantage of the once-a-year freebie and check your credit report for accuracy and to help avoid identity theft. If you want an idea of what your score is, buy the FICO score, developed by Fair Isaac Corp., and avoid signing up for a monitoring service, which isn’t worth the cost.

• Have “that” conversation with kids or parents.  Talk to your adult children or your parents—or both—about your or their estate, philanthropic goals and other wishes. If your children are still at home, start a conversation about money and investing. Prepare a will or draw up papers for a health-care proxy or power of attorney. Don’t avoid these issues until it’s too late.

• Declare your financial independence. After the first half of the year is over, review your portfolio to be sure you’re still properly diversified in a comfortable mix of stocks, fixed income and cash. If you don’t feel confident making these decisions, find a financial adviser to help you. Check references and interview a few to be you mesh well—and that their fees are reasonable.

• Tame monthly bills. Review your biggest monthly expenses to see if you can find some l savings. Can you combine cable, phone and Internet services in a lower monthly rate? Refinance the mortgage?

• Don’t let gift cards go to waste. Round up your unused gift cards and use them for yourself or for gifts for others, swap them with family members or donate them to a charity.

• Reflect on what’s most valuable to you. What do you truly value? Were your best-spent dollars for a night of theater with friends, or a great trip? Consider the most meaningful ways for you to spend your money.

To get in touch with WSJ original writer, contact Karen Blumenthal at familymoney@wsj.com  or view the entire article at http://online.wsj.com/article/SB10001424052748704234304574626042291925748.html?mod=WSJ_PersonalFinance_FamilyFinance#articleTabs%3Darticle

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Date: Monday, 18. January 2010 12:31
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