How To Not Suck… At Making Financial New Year’s Resolutions

It’s not quite 2014, but we’re already sick and tired of promises to help consumers make their resolutions a success. Lose 15 pounds in one week! Never crave a cigarette again! Watch your wrinkles disappear! Make sure you’re ready for intimacy whenever your partner is! Enough with the empty — or questionable — promises.

Instead, before you set New Year’s resolutions that you break before you lose your hangover, remember that being realistic about your goals is half the battle. The other half is making it simple.

We’re not going to tell you to lose weight or quit smoking (though that may lead to money savings in lower premiums for health and life insurance), but we will offer these tips so you don’t suck at keeping your money resolutions.

Use Your 401(k)

If your employer offers a 401(k) or similar retirement plan, take advantage. These plans allow you to save money pre-tax, which means you can lower your taxable income with every dollar you contribute up to the maximum, which for 2014 is $17,500. Those 50 and older can save an extra $5,500 “catch-up” contribution for a total of $23,000. After you contribute, your money grows tax-deferred, meaning you won’t pay taxes on your earnings until you withdraw the money in retirement.

If you don’t contribute yet: Start. If you can’t contribute the max, ask your benefits administrator about matching funds. These are free dollars your employer will add to your account based on your contribution level. Try very hard to at least contribute enough to take advantage of the full match so you’re not leaving free money on the table. If you earn $50,000 a year and save 5 percent of your salary, and if your employer matches 50% on the first 4% you save, a 30-year-old could have more than $500,000 at age 65 if the account earns an average of 7% a year.

If you already contribute: Consider upping your contributions. Maybe set your sights on increasing your percentage by 1% every two months so you can slowly get used to having a little less in each paycheck. If you save 10% of your salary with the same assumptions, you could have more than $860,000 at age 65.

Try’s 401(k) calculator to see how much you could save.

Stop Guessing About Your Budget

You may have a pretty good idea of where you spend your money, but most people simply guess-timate. And you can imagine many of the guess-timators are wildly inaccurate.

It’s hard to set money goals if you’re not really sure what you spend. So get to it.

You can do it the old-fashioned way — keep a small notebook in your pocket and mark down every penny you spend. Or, you can get high-tech with apps that allow you to enter all your spending on your phone — which you probably have with you every time you take out your wallet, anyway.

Try apps such as those recommended in this story by CNN-Money and this one loved by LifeHacker and take a look at BankRate’s favorites.

Stop Using Plastic

Easier said than done, but give cash a try for a change. Or at least promise yourself you won’t use credit cards until you’ve paid off your balances from that excessive holiday spending.

While you’re on credit card hiatus, take a close look at all the cards you have and decide which is the smartest for you to use regularly. Refresh yourself with the rules of your rewards cards, too.

Cut Down on Bank Fees
BankRate offers some scary banking fee numbers for 2013. The average overdraft fee rose 3% to a record $32.20, according to the site. And the average cost for using another bank’s ATM set another record, rising 2%, to $4.13.

For the new year, vow to avoid bank fees. How? Start by refreshing your memory on how your accounts work. Review ATM charges, minimum balance fees, checking fees and more, and see if you can find an account that will do better by you. Check out’s lists of the best checking accounts, savings accounts and more.

Start a Rainy Day Fund

Unexpected expenses are a part of life, so you may as well be prepared.

Start an emergency fund. This would be money you set aside in a separate bank account that you don’t tap unless you really, really need to. You know, in case the roof caves in or you need to have teeth pulled.

Most financial advisors suggest you keep three to six months of expenses in a rainy day fund. That may seem overwhelming, but remember, Rome wasn’t built in a day and all, so you can take your time building your account.

Let’s not count interest here — because let’s face it, because most savings and money market account pay a pittance these days. But if you set aside $10 per week, you’ll have $520 in a year. If you save $25 per week, you’ll have $1,300, and $50 per week will give you $2,600.

While you’re at it, start a holiday savings fund for your 2014 purchases.

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You can read Karin Price Mueller’s stories for The Star-Ledger at, follow her on Facebook, and on Twitter @kpmueller.

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