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Financial heaven in 2011? These 12 monthly resolutions may help you get there

January 06, 2011

| MoneyRates.com Senior Financial Analyst, CFA

Between high unemployment and foreclosure rates, the past few years have felt like financial hell for many Americans. Whether your financial difficulties were your fault, the only person you can count on to make things better is you.

To help you move from financial hell to financial heaven -- or at least take some steps in that direction -- MoneyRates.com offers this year's list of monthly resolutions:

  1. Raise your personal savings rate. Start the year off with some hard-line budgeting. Start with a goal to get your savings on track, and then prioritize to see what you can afford this year with what's left over.
  2. Take advantage of tax-deferred savings opportunities. You can still deduct an IRA contribution on your 2010 taxes if you make the contribution by the April 15, 2011 filing deadline. Then, going forward, make sure you max out any opportunity to save in a 401(k) or similar company-sponsored plan, or at least contribute enough to capture the full employer matching contribution.
  3. Shop for the best CD rates, savings rates, or money market rates. Compare alternatives, such as money market accounts and traditional savings accounts, and shop for the best rates within each category.
  4. Save your tax refund. If you get a refund on your taxes, don't treat it as a gift you can splurge on anything you want. View it as a rare opportunity to put a lump sum towards getting caught up on savings.
  5. Make sure you still have free checking. Shake-ups in banking finances and regulations have caused many banks to re-evaluate offering services like free checking accounts, but the death of free checking has been greatly exaggerated. If your bank imposes a new fee on your checking account, it's time to shop for a new bank.
  6. Opt out of overdraft protection. In 2010, customers were given the choice of opting out of checking account overdraft protection, but reportedly most customers opted in. Overdraft fees are exorbitantly expensive, so even if you originally opted in, it's never too late to change your mind and start avoiding these fees.
  7. Look into refinancing your mortgage. Especially if conditions prevented you from refinancing last year, check to see if it is feasible this year.
  8. Reset your retirement savings target. Your retirement assumptions need to change as conditions change, so once a year you need to update your assumptions to keep your savings on target.
  9. Check your property tax assessment. Property values have fallen steeply in many parts of the country. If your property tax assessment hasn't fallen as well, you may be overpaying on your taxes.
  10. Re-stock your emergency savings. A brutal job market ravaged many people's emergency funds, but once the employment situation improves, it's time to rebuild this financial cushion.
  11. Re-prioritize your credit card debt. Credit card rates are changing all the time, so check to make sure you are paying down the highest interest debt first.
  12. Be disciplined about your holiday shopping. It is possible to have a soft heart on a firm budget. Do some thoughtful planning before you start to shop, and stick to your plan.

All of the above may not apply to you, but chances are many do. The more of these resolutions you can follow through on in 2011, the closer to financial heaven you should be by the time the year ends.

Want more resolutions for the new year?  Check out last year's resolutions and incorporate them into your plan for financial success in 2011.

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