Tax and Finance Savvy New Years Resolutions

The New Year has begun and it is a time when people all over the world set goals or resolutions for themselves. Lots of people join gyms or decide to start a new diet, but in addition to resolutions that are good for your health, I think it is a good idea go with a few that are good for your wallet. Here are my favorite tax and finance savvy New Years resolutions.

Don't Wait until April to Think About Taxes

Most Americans wait until March or April to start worrying about their taxes. However, I recommend making a short term goal to start working on your tax return this month, and try to get it filed some time in February. That way you can get your refund nice and early, and also avoid crowded tax preparation offices if you are going to seek professional help for your return.

Stay on Top of your Tax Planning

You shouldn't let the whole year go by without thinking about taxes again. By staying on top of your tax planning throughout the year then you can help keep your liability as low as possible. Also, you can prevent being faced with an unexpected tax bill next April.

Give More of your Time to Charity

In addition to donating your unwanted household items, which all will result in a tax deduction, why not give more of your time to charity this year? Since the recession began many nonprofit organizations have been struggling, and by spending a few hours volunteering won't cost you anything out of pocket. Additionally, if you do have to purchase supplies, or drive while volunteering then you can deduct these expenses.

Don't Rely on Credit

Cutting back on credit cards is always a good New Years resolution. In fact, in 2010 fewer Americans used credit then in years prior. Now is a great time to jump in on the trend. Instead of relying on credit try to make a strict budget and use your ATM card instead of your Visa or MasterCard.

Live a Greener Year

These days there are plenty of incentives to living a greener life. In addition to helping the planet you may also be able to qualify for a federal tax credit. For more information on which purchases qualify, check out EnergyStar.gov.

Start Planning for your Retirement

It is never too early to start planning for your retirement. If you do not already have an account, then make it a resolution to start an IRA or 401(k) in 2010. If you already do have a retirement account, then you could make it a goal to max out on your contributions.

Save for a Rainy Day

These days many Americans are struggling to pay their bills. However, if you can afford to do it, then try to begin setting aside money from each of your paychecks. You never know when a rainy day will hit, and you will be better equipped to deal with it if you have a little extra money set aside.

Top 10 Money-Savvy New Year’s Resolutions

Now that 2010 has begun, people across the country will make pledges to change or alter their behavior in the New Year. However, instead of making a resolution to visit the gym more often or reduce your sugar intake, why not focus on taking control of your finances? I often encourage friends and family members to setup money-savvy New Years resolutions, and this year I decided to share my advice with all of my blog readers as well.

1. Shop Smart

The average family in America spends $700 or more per month on food, much of which goes to waste. This year how about making a resolution to eat out less or save money on food by planning your meals in advance and buying in bulk. If you enjoy eating lunch out with coworkers every day, then you might consider making a resolution to only eat lunch out once a week.

2. Do Not Be Lazy

No one likes to admit it, but laziness can cost you a lot of money. I am talking about that overdraft fee you had to pay for not depositing your paycheck right away or that late fee you had to pay a few months ago for forgetting to send your rent in on time. This year, take a more proactive approach to life and you will be surprised to see how much easier it is to manage your finances. By keeping your bills organized, balancing your checkbook, and keeping a budget, you can take control of your money.

3. Cut out Credit

These days credit cards are so common that people do not think anything of using them on a regular basis. However, this is dangerous, and can cost you thousands of dollars per year in interest. Instead, why not make it a resolution to pay with cash or your ATM card unless absolutely necessary.

4. Quit Something Pricey

Are you ignoring a habit that is costing you a lot of money? Whether it is smoking, shoe shopping, or even gambling, many of us have at least a few pricey habits. By making a resolution to cut out your bad habit, you can find yourself saving quite a bit of money this year. Some might not even need to be quit all together. If your indulgence is getting expensive cocktails with dinner then you might try making a drink at home before you go out. On the other hand, if your pricey habit is buying lots of electronics then you could make it a resolution to reduce your spending.

5. Pick up Good Habits

While dropping a few habits that waste money, you should also think about picking up a few that will help you manage your finances. It could be something as easy as turning lights off when you are not home, or something more severe like making charitable contributions on a regular basis, which can help lower your taxable income.

6. Dump Debt

For some of us, making regular monthly payments to reduce a debt has become a common part of life. However, making low or minimum payments will keep your debt alive for years to come. Instead, make it a resolution this year to dramatically reduce your debt. Make payments of as much as you can afford, and pay off bills with the highest interest rates first. Then, next year you can celebrate with less or possibly no debt.

7. Make Time for Banking

If you find yourself frequently over drawing your checking account, or are often shocked to find you have less money in your bank account than previously thought, then you might want to make a resolution to spend more time managing your bank account. Try setting aside ten or twenty minutes every few days to check your accounts online, or balance your checkbook.

8. Prepare for your Future

If you do not already have a retirement account setup, then finally opening one should be at the top of your list of potential resolutions. Depending on the type of retirement account you select, it could also help lower your tax bill for 2009 and years to come.

9. Stay Tax Savvy

Although most Americans wait until March or April to start worrying about their taxes, this is definitely not a good financial strategy. There are plenty of ways you can stay on top of your taxes, and keeping a low tax bill is a year-round process. Keeping documents organized, and staying up to date on the latest tax laws is a great resolution that can certainly help you keep your finances in check.

10. Retrain Yourself

No matter how many tips you read and think you will follow, after a few days or weeks, there is always a possibility that you will fall back in to your old habits. In order to avoid this common resolution problem, you need to completely retrain yourself when it comes to money. Instead of wasting your extra money on an expensive evening out, put some of it into a retirement account or donate it to a qualified charity. If you commit, then you will see staying money-savvy in 2010 is actually easier then you might assume.

Create Your Compelling Future in 2009 with Better Balance

Sylvia Warren of SimplytheBestCoaching.com recently authored a new article on one of my favorite blogs, the Glass Hammer, on how to improve your finances in 2009. Below is a snippet from the article, but you can read the full text at this link.

Busy beyond belief before you have had a chance to give your New Year’s resolutions a second look? Perhaps the title to that Paul Simon song - Still Crazy After All These Years - describes your January 2009.

If you are ready for better balance, yet not sure how to get it, you are not alone. A national survey of 500 full-time professionals, conducted in late November 2008, tells us that even amidst layoffs 47% of the respondents desire more life balance in 2009. In addition, 86 percent of survey respondents plan to pursue better balance in 2009.

Gaining better balance takes daily practice. T. Harv Eker of Peak Potentials Training says it best: “Practice does not make perfect. Practice makes permanent.” Wildly successful entrepreneurs, executives and professionals learn to leverage how they are creatures of habit. Their simple daily practices lead them to better balance habits.

With all the uncertainty and challenges of these times, a daily practice of life balance requires greater clarity, focus, and inspired action. Clarity frees you to define which life and work priorities are most important to you now. Knowing this includes understanding the hidden payoffs you received in the past from not having enough balance in your work and the rest of your life. Focus keeps your priorities in clear view so you stay on target. Attention to simple balance practices enables you to be flexible enough to avoid the burden of guilt or self-criticism. Action builds your sense of momentum.

Daily playful practices give you more and more experiences of the life balance you seek.