Has Too Much Spending
Left You with a Holiday Hangover?The Cure: Making a Smart Finanical Move Right Now
With the holidays gone, there's nothing left to do but wait for the ugly credit card bill to arrive in our mailbox right? Gifts, travel, dining and champagne purchased in December can — fiscally speaking — ruin 2006. But all is not lost. If you busted your budget in December, make these moves to ensure success in 2007:
- Invoke a January austerity program. Alright, we had fun in December, overeating and overspending. So for just one month, let the pendulum swing back to frugalness and a healthy lifestyle. Forget dining out. Plan your meals and do your grocery shopping with savings in mind. And stay out of the malls. If you have to exchange a gift, don't buy something else along the way. Resist the January "sales." Most of us are sick of shopping, would benefit from a little detoxification and are looking forward to a slower pace anyway. So if we're ever going to be good for one month, January is the best bet. Use that momentum.
- Fund last year's IRA. That's right! You can still fund your 2006 Individual Retirement Account and, if you qualify, enjoy a tax deduction on your taxes due in April. A traditional IRA allows you to save up to $4,000 and, depending on our income, deduct that amount on your taxes. You have until April 15, 2007, to fund your 2006 IRA. See a financial adviser to set one up.
- Build your 2007 budget. During your January austerity program, take the time to get a little more organized. Or, if need be, a lot more organized! While a budget can't right a financial ship by itself, it is a good start. For those who don't save as much as they think they should each year, success starts with seeing on paper where the money is going. Debt Matters has covered budgeting in the past. To get started, click here.
- Earn a big, fat zero. If we had one wish for most American consumers, it would be that they get to experience the joy of zero — the exhilaration of when your credit card statement arrives with the news that you paid nothing in finance charges last month. Consider that some people experience this every month! Our advice: At the same time you build your budget, create a plan for killing your revolving debt. Nothing beats the feeling of … well … nothing.
- Enjoy five percent. Savings rates are pretty high, as much as five percent. Why not get in on the game by opening a savings account? If your local bank doesn't offer a rate of nearly 5 percent, try online. We all need an emergency fund anyway. This year, move yours to a serious interest-bearing account and watch it grow.
