12 resolutions for the new year
Get your finances in order for every month of the year.
If you haven't already you probably will soon be joining the nearly 75 per cent of Canadians who say they intend to make at least one New Year's resolution.
For those still contemplating the perfect vow for 2012 you could always drag out the usual suspects — lose weight, get more exercise, eat better, spend less or save more. But I say, chuck it; instead try something completely different — a financial resolution for every month of the upcoming year.
Don't gag. I know, keeping a single resolution is tough enough; tackling 12 seems impossible. But look at it this way: Big, generic resolutions are notoriously difficult to keep. In fact, fewer than 20 per cent of resolvers stick to them after the first month.
However, if you break a big job into more manageable smaller ones, success is within your grasp. The other issue with broad financial resolutions is that they overwhelm most people. A series of clearly defined tasks gives you a place to begin.
Here are some suggestions for a 12-month resolution program:
January — Save for Santa. There are 12 shopping months until next Christmas! Start saving now. Add up what you just spent during the holiday season — consult bank and credit card statements and don't forget to estimate how much cash was used. You'll probably be shocked. Make a decision about how much you want to spend next year and divide it into 12. Set aside that amount every month in a jar or separate bank account and there will no more holiday debt at the end of 2012.
February — Set up or adjust your automatic savings plan. If you are already contributing monthly to a TFSA, RRSP or RESP, take a look at each one and try to increase them a bit. Don't bite off too much. For example, if you are depositing $100 into your RRSP bump it to $110.
March — Start taxes early and do them yourself. You can get a discount on tax software through most of the major banks. At the beginning of the month organize receipts and pay stubs. Next do the math. Add up deductions such as medical/dental so you have the number at hand. Finally, fire up the tax program and let it guide you through filing your taxes. You will save money and be more aware of your finances.
April — Deploy the refund. Assuming you stuck to the March resolution you should have the refund in hand sometime this month. Apply it to high interest credit card debt.
May — Budget for summer. Most people like to take a summer holiday but few budget for it. Set some numbers down on paper and you will be amazed how that focuses your thoughts on where you can afford to go and how much you can spend.
June — Tax freedom month. It's time to smell the roses. You've worked all year to pay various taxes, now you're working for yourself. Take a break. Enjoy or rediscover a few simple pleasures this month.
July — Have a no-buy month. Summer is the best time for a spending diet since the weather is nice. Buy nothing this month except the absolute essentials. Such a spending purge leaves you feeling financially flush at the end of the month and wonderfully in control.
August — Axe a habit. Magazines are my weak point. What's yours? It could be multiple coffee and donut runs, cigarettes, lottery tickets or takeout. Get rid of a bad habit this month, estimate your savings and put the money on debt.
September — Involve your kids. Bring children into the family financial fold. Start giving kids responsibility for back-to-school shopping, including drawing up a list and buying the items, with supervision for the younger set. You'll be teaching them valuable skills and they'll have fun at the same time.
October — Donate now. Most of us like to give to charity but we often leave it to the last minute. Doing it in October relieves the financial stress in December.
November — Channel your inner Bobby Flay. Resolve to make every meal in your own kitchen. Don't forget to use leftovers. You'll be healthier and your wallet will be fatter at month's end.
December — Make a list and check it twice. Before holiday shopping create an "A" and a "B" list for gift-recipients. On the A list goes everyone you really want to give a present to and on the B list is everyone else. The B listers get a card and a personal note — no gifts unless it is something like homemade cookies. Put a spending limit beside each A name and stick to it. You'll have holiday happiness and no spending hangover in the new year.
Now you have it, twelve months and twelve resolutions for 2012.
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