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Ring In Your New Year With a Financial Transformation

By Erik Folgate

The beginning of the year is always the best time to start a new habit, break an old one, and most importantly, set new goals. I know that New Year’s resolutions are very cliche, but they serve a good purpose. New Year’s resolutions usually fade away in March, but that’s because many people do not treat them as real, attainable goals to sustain the year and the rest of their life. One of the most important goals you can make for 2008 is to improve your financial life. I am such a big believer in straightening out your finances, because I believe that poor financial health affects all areas of your life including your marriage, physical appearance, and mental stability. Think of the husband out there right now who is going through foreclosure on his house, could lose his job, and has thousands of dollars of consumer debt. It’s fair to assume that his marriage is on the rocks, he hasn’t exercised in months, and his stress levels are at an all-time high.

Here are three ways that you can help maintain your financial new year’s resolutions:

  1. Set attainable goals. Don’t set a one year goal of earning $10 million dollars. It’s great to dream big, but there is a place and time for that. You want to set yourself up for success and results, not a failure and let down.
  2. Cut up your credit cards. If one of your goals is to eliminate or reduce your consumer debt, there is nothing better to do than get rid of the biggest temptation in your wallet. If you were great with managing credit cards, you wouldn’t be carrying a balance right now. Cut them up, and stop trying to figure out a hundred different ways to earn airline points and 2% cash back. It’s not worth dealing with companies that are notorious for horrible customer service and hidden fees.
  3. Find money in your budget to save every month. Even if it’s a $50 to $100 a month, you need to have something left over at the end of the month or else you’ll never have any money to attain your goals of saving for retirement, a car, a vacation, or a house. Once your income increases, you start paying off debt, and you find more creative ways to boost your income, you’ll be saving more before you know it.

Next week, I will spend each day going through a Money Crasher’s series about succeeding in your financial new year’s resolutions. Take the time this week to write down five new year’s resolutions that have to do with your money. Then, pick two or three that you are confident that you can achieve in 2008. My two new year’s resolutions are to cut our consumer debt in half and save $15,000 for a down payment on a house. I am fairly confident that we can do this, because my wife will be working starting in the summer as a physician assistant, and our income will more than double at that point. As long as we stick to our budgeting plan with the extra income, we should be able to pay off half of our debt in six months, plus save enough money for a down payment on a house.

What are your goals for this year, and how will you attain them? Come back next week to read more about how to achieve your financial goals for 2008.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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