Shape Up Your Finances with These 10 Tips

Many of us made a renewed commitment to our health with the New Year, but what about our finances? Here are 10 tips to ensure a financially fit summer!

1. Extra Bank Accounts – Get rid of all those extra bank accounts. If your money is scattered into too many accounts you risk not being able to accurately track your finances. One linked checking and savings account should suffice. This means less statements and paperwork to deal with!
2. Direct Deposit – Time is money. If your company offers direct deposit consider taking advantage of it! It’s as simple as providing a voided check. Each month your paycheck will be automatically deposited into your account. You’ll save valuable time avoiding bank lines on payday and will be less likely to take out extra cash when you deposit your check.
3. Automatic Payments- With automatic payments, you give authorization to billers to take money directly from your account. This is an excellent way to manage routine bills such as mortgage and car payments. Automatic payments can be set up with a debit card or on-line. Many people are wary of automatic payments, however, federal laws are in place to protect your account.
4. Overdraft Protection – Bounced checks are an unnecessary expense. There may be a small annual fee to set up overdraft protection, but it is typically less than the cost of even one bounced check. Good money management will help you to avoid going into overdraft.
5. Invest in the Future – Consider increasing your 401k or IRA contributions. If you have 401k plans from former employers, you may want to roll them over to your current plan. Again, you’ll have fewer accounts to track and can avoid maintenance fees sometimes charged if an account falls below a certain level.
6. College Funds – Save for your children’s future now. Even a few dollars a month will put a dent in future tuition costs. Check out your state education savings funds.
7. Credit Cards – Reduce the amount of credit cards you hold. This will not only help you control spending, it will lessen the chance for identity theft and account errors. Review your credit report at least annually to ensure you are eligible for future loans. Click here for how to get your free credit report.
8. Portfolio Review – Take an inventory of your stocks and mutual funds and monitor performance periodically.
9. Personal Finance Programs – Using software or a service is a great way to track your spending! You can track earnings, debt, retirement contributions, net worth, etc, all in one format. These programs can convert your financial data into pie charts and bar graphs. Having this visual is extremely helpful. They also allow you to set up alerts for when bills are due and can warn you when an account it getting low. You can easily customize the software to fit your needs. Check out Mint.com, they offer a free and user friendly service.
10. Organize – Create a filing system that works for you. Office supply stores offer a variety of options. Have a place for new bills, statements, paid bills, tax returns, etc. Once a year archive and/or shred statements and receipts you no longer need. Being organized is key to the success of every tip above!

Please feel free to share your own tips with our readers!

Published Jun 30, 2008.