MONEY
s a v in g s— to m ake up th e d iffere n ce .
“ V e ry fe w o f us ca n live w ith a v e ry
a u ste re sp e n d in g p la n ,” W e sto n says. “ T h is
is b a la n ced . N o t e v e ry d im e y o u m ake is
g o in g o u t th e d o o r b e fo re you h ave a ch an ce
to h ave a n y fu n .”
Action tip:
B lock o ff an h o u r to sit d o w n ,
g o o v e r y o u r fin a n ce s, and co m e up w ith
a sp e n d in g plan . F or a ste p -b y -ste p g u id e
on h o w to m ake a b u d g e t, go to
B H G .co m
/
bestyeareverjbu dget.
GET SPECIFIC ABOUT SAVING
R eso lvin g to save is g re a t, b u t v a g u e in te n -
tio n s w o n ’t b u ild up y o u r b a n k a cco u n t.
“ W h e n y o u say, T w a n t to save m o n e y e v e ry
m o n th ,’ w h a t en d s up h a p p e n in g is y o u
se ttle fo r sm all ch a n g e s in th e rig h t d ire c -
tio n ra th e r th a n th e b ig ch a n g e s,” says H eidi
G ra n t H alvo rso n , a so cia l p sy ch o lo g ist and
a u th o r o f
S u cceed .
B ut research sh o w s th a t if
y o u m ake y o u r g o a ls a m b itio u s and d e ta ile d ,
y o u are fa r m o re lik e ly to reach th em . “A
recen t stu d y sh o w s th a t th e m o re p eo p le
ca n e n v isio n th e m se lv e s in re tire m e n t th e
m ore lik e ly th e y w ill b e able to save,” says
D avid K ru eger, a p sy ch ia trist-tu rn e d -
fin a n cia l co a ch an d a u th o r o f
T h e S ecret
L a n g u a g e o f M oney.
I f it fe els lik e fo re ig n t u r f to y o u , y o u ’re
n o t alon e. It’s e stim a te d th a t ju s t 10 p e rce n t
o f A m e rica n s h ave lo n g -term g o a ls, K ru eg er
says. S o s ta rt p a in tin g m en tal p ictu re s o f
y o u r fu tu re w ith m ore sa vin g s. W h a t co lle g e
w ill y o u sen d y o u r k id s to? W h a t co lo r w ill
y o u r n ew h o u se be? G e t in sp ira tio n fro m a
co lla g e o f y o u r fa n ta s y re tire m en t.
O n c e y o u h ave th o se g o a ls, e stim a te
h o w m uch th e y w ill c o s t— and h o w y o u w ill
rea ch th e m , ste p -b y -ste p . “ P eop le say, T i l
sp en d less m o n e y on e a tin g o u t,” ’ H alvo rso n
says. “ T h a t’s n o t fa r en o u gh . T ry , T m g o in g
to p ack m y lunch X n um ber o f tim es a w eek.’”
Action tip:
S et up y o u r d ire c t d ep o sit
to a u to m a tica lly d ed u ct m o n e y fro m y o u r
p a y ch e ck and d ep o sit it in a sa vin g s
a c co u n t. I f y o u r sa la ry d o e sn ’t g o d ire c tly
to y o u r b an k , w h e n d e p o sitin g y o u r
p ay ch eck , sen d sa v in g s to a sep arate
a c co u n t at th e sam e tim e .
CONFRONT YOUR DEBT
T h e a verag e A m e rica n h o u seh o ld h as ab o u t
$ 10 ,0 0 0 in cre d it ca rd d eb t, a c co rd in g to th e
F ed eral R eserve, y e t m o st p eo p le d o n ’t even
k n o w h o w m uch th e y o w e. I f th a t’s y o u , it’s
tim e to ta k e a b ru ta lly h o n e st lo o k at th e
situ a tio n , a d v ise s w e a lth m a n a g e r S u san
H irsh m an , a u th o r o f
D oes T h is M a k e M y
A ssets L ook Fat?
T a lly up e v e r y th in g y o u ow e
o n y o u r h o u se , car, an d cre d it ca rd s, and
w rite it on a p iece o f paper. “ U n til y o u sit
d o w n and ta k e a lo o k at w h a t y o u h ave, w h a t
y o u o w e, an d w h a t y o u w a n t to a ch ieve, you
c a n ’t sta y c o m m itte d ,” H irsh m an says.
O n ce y o u k n o w w h a t y o u r n u m b er
is, y o u can g o ab o u t lo w e rin g it. L ist all
o f y o u r d eb ts fro m h ig h e st in te re st rate
to lo w e st. T h e n b u ild in to y o u r b u d g e t a
p lan fo r p a y in g it all d o w n as fa st as you
ca n . L o an s w ith lo w e r in te re st rates g e t
m in im u m p aym en ts. T h e d eb t w ith th e
h ig h e st in te re st g e ts all availab le e x tra
ca sh u n til it’s cle a re d and y o u can m ove on
to th e n e x t a cco u n t. N o w go b ack to y o u r
50 -30 -20 eq u atio n . Ideally, th e m in im u m
p a y m e n ts co m e o u t o f y o u r n eed s and th e
re st o f y o u r d eb t p a y m e n t co m es fro m th e
sa vin g s. W h e n d e cid in g h o w to b alan ce
th a t 20 p e rce n t b e tw e e n sa v in g s and d eb t,
co n sid e r y o u r in te re st ra te s, w h e th e r y o u
h ave a n y fin a n cia l cu sh io n , an d w h e th e r
y o u r em p lo y e r is m a tch in g a n y sa vin g s.
“ It’s ab o u t g o in g fro m a sen se o f d ep riva-
tio n to a sen se o f pow er,” H irshm an says.
“ R ath er th an , ‘H ere are all th e th in g s I have
to give up,’ fo cu s on w h at y o u ’re g e ttin g .”
Action tip:
T ak e a loo k at y o u r cred it card
b alan ces and see if y o u have ro om to tra n sfe r
b alan ces fro m h ig h -in terest acco u n ts to low -
in terest a cco u n ts, w h ich w ill k eep th e debt
fro m a ccu m u la tin g as quickly. ■
TECH TOOLS
D
i g i t a l
E
y e s h
a d
e
O u r fa v o rite o n lin e
r e s o u r c e s h e lp y o u m a k e
th e m o s t o f y o u r m o n e y .
1
M in t.co m A one-stop
shop for tracking
your finances, the
site can provide
sn ap sh o ts of your
spending, budget,
and assets; send you
alerts about overdue
bills; and help you set
financial goals.
2
B illS h rin k Suggests
m oney-saving altern a-
tives to your cu rren t
providers (think cell
phone, credit cards).
3
S m arty P ig This site
w as designed to help
you m eet savings
goals. Sign up for a
free account, specify
w hat you're saving
for, and get above-
average in terest rates.
Cash out any tim e,
w ithout a penalty.
4
E b a te s A few extra
seconds can save you
1
to
3 5
percent w hen
buying online. Sign up
for an account, click
through to Ebates
shopping p artn ers,
and get cash back on
your purchases.
BEST YEAR EVER
6
0
.
3
%
o f y o u t o l d u s t h a t y o u r N o .
1
g o a l f o r 2 0 1 1
w a s i m p r o v i n g y o u r f i n a n c i a l h e a l t h .
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