Do you have a financial game plan? The start of a new year offers a great opportunity to be proactive about getting your financial life in order and experiencing financial peace of mind. The goal I hold for you in 2011 is to build enough wealth so that you can afford the life you were born to live. I don't care about fancy houses and flashy cars. I'm talking about fulfilling your life purpose and providing the unique contribution to this world only you can make. So, if your personal budgeting skills need refreshing, or if your portfolios and insurance policies have not been recently reviewed, then committing to the following resolutions can help make 2011 the year you transform your financial future.
1. Resolve to spend less than you make. The oldest financial advice is still the best -- spend less than you take in. This will keep you out of debt and help you build fiscal stability.
2. Automate your finances. If something isn't easy, most of us simply won't do it. Make it easy on yourself by automating your bill payments. You can save hours of work every month and won’t forget to pay your bills.
3. Create a spending plan. Determine how much you plan to spend and divide that money between your different spending accounts. Give yourself some flexibility to allow for some of those impulse buys without ruining your overall plan. Individuals who successfully create and follow spending plans often save as much as 10% of their income during the year - simply because a spending plan guides them in making good spending decisions.
4. Save at least ten percent of your income. If you don't pay yourself first, there won't be any left over at the end of the month to save. Set up an automatic transfer to a savings account to make it easy.
5. Start an emergency fund. Use part of your savings to create an emergency fund. You should have three to six months' worth of expenses set aside in an easily accessible account to cover mortgage, food, car payments and other necessities in an emergency. Keep it separate from other funds to avoid spending it.
6. Pay at least the minimum on your credit cards. And pay off as much extra as you can. Making at least the minimum payment on time to help your credit score from taking a knock. Resolve to take control of your credit card usage and set a goal to pay off outstanding balances as soon as possible. Paying off the entire balance each month can save you hundreds of dollars in interest.
7. Begin paying off your debts as quickly as possible. In today's economy, the best investment you can make is to quickly pay off all your debts. When you're ready to pay off your debts you have to decide if you need the motivation from paying off smaller debts or using the highest interest method that gets debts paid quicker.
8. Check your credit reports. You're entitled to one free copy of your credit report from each of the three credit-reporting agencies at your request each year. Stagger the reports receiving one every four months to keep an up-to-date view of your credit throughout the year.
9 Review your insurance policies and update as needed. Review your life, health, home, auto, and disability insurance policies. Make sure you have cost replacement coverage on home and auto insurance, as well as good liability coverage. Make sure your home insurance reflects the current value of your home.