There could not be a better time to mull over the changes needed
in our life style than at the beginning of a New Year. This is
also a good time to set yearly goals and make resolutions. Each
year, according to statistics, almost a third of us make some
kinds of New Year Resolutions. Interestingly, although financial
future is our main cause of anxiety, our personal finance,
according to surveys, gets only to the fifth place in the list
of most common New Year resolutions.

For those of us who are still in the process of making New Year
resolutions, my suggestion is to give high priority to financial
aspects.

Here are some resolution ideas that may change your financial
future over the course of time.

Saving

Lets make one thing clear! What ever amount of money you make
it’s probably never enough! The way our consumer psychology
works is our demand increases along with our income. This makes
saving really a problematic task! Some people do have inborn
ability to save willingly, but most have to force themselves.
If you are one of these people, who find saving a difficult
thing, you should consider the methods described below.

• Commit to yourself that each month you will set aside
minimum ten percent of your income for investment
purposes.

• Make a strict habit of depositing 10 percent of all your
incomes directly to your saving account.

• No matter what happens, don’t give up.

You might argue that your income is not enough to make any kind
of savings. Believe me, once you try putting away 10 percent of
your earnings, you will see that this really does not have any
serious impact on your budget.
So your first resolution is to save ten percent of all your
incomes month after month.
There is hardly any point to save if you don’t put your money
to work for yourself! So, once you resolved to save, you need
to invest your money wisely.

Credit cards and other consumer loans

According to New York Times through out the last decade use of
credit cards has increased dramatically. The number of the
people having credit cards raised about 75 percent from 82
million in 1990 to 144 million in 2003. However, the debt
burden that they carry had grown 350 percent from US$338 billion
to an astounding US$1.5 trillion. In 2003, according to the same
report, average household carried a debt of US$ 7,520 in
comparison to US$2,550 in 1990.

This means that credit card loans are becoming serious problems
for average Joe. That’s why the first step of your investment
strategy should be to get rid of your consumer debts- especially
your credit card loans. Most credit cards have horrendously
expensive interest rates – normally, 18 percent and over.
If you are one of those people, who pay only minimum payment
amount each month to their credit cards’ debt, you are making a
great mistake. Check out the calculator at
http://www.bankrate.com/brm/calc/MinPayment.asp
to see how much you are loosing by not eliminating your credit
card debt burden.

If you are looking for financially sound future, take a hard
look at your credit cards and resolve to do the followings:

• From the savings you started to make, pay off maximum
amount of your credit cards’ debts until you completely
eliminate them.

• If you are unable to pay off the whole amount at once,
don’t just pay the minimum amount required; pay out as
much as you can over that limit.

• Shop for credit cards with minimum interest rates – which
should not be more than 12 percent – and switch to them.

• Use credit cards strictly for convenience only. Don’t
charge to your credit cards unless you know for sure
that you will be able to pay it off right away.

• Minimize the quantity of credit cards you are holding.
There is no reason to have more than three credit cards.

Same goes for your other consumer loans like student, car, etc.

Mortgage

The second step of your investment strategy should be to
evaluate your mortgage payments. There are several very simple
ways of reducing your payment time dramatically. Used scrupulously
these methods can lower a 30-year mortgage to 10-15 years.

• Instead of making one single payment each month, every
two weeks pay out half the monthly payment. The idea
behind this is, since you are making 26 payments in a
year – each one of them carrying 50 percent of your
monthly payment – this is equivalent to 13 monthly
payments. You are generating an extra month’s payment
each year, which in turn will reduce your mortgage term
substantially.

• Whenever possible, each month try paying ten percent
more than you are supposed to.

• Whenever you manage to make some extra earnings, use a
portion of that to pay down your mortgage.

The mortgage calculator located at
[http://www.mortgages-loans-calculators.com/Calculator-Mortgage]
-Payoff.asp will help you to see your progress.

Keep track of your expenses

If you don’t do it yet, resolve yourself to keep an expense
ledger of all spending. Just the mere act of jotting down all
your expenditure will reduce your expenses up to 20 percent.
The reason is when you start keeping track of the money you
spend, you become more careful and discerning in your buying
decisions, which in turn help you cutting back and saving hard
earned money.