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Five New Year's Resolutions to Jump Start Your Savings


You would think as much as everyone is worried about how the fiscal cliff may impact their wallet that money management would be top-of-mind, but TD Ameritrade's 2013 Outlook Survey revealed that although half of those polled said 2012 was financially challenging, 42% say they prefer to make health-related New Year's resolutions over money-related resolutions, 16%. Maybe it's because they are optimistic. Some 43% said they expect the economy to rebound next year, compared to nearly double the percent who believed that this time last year. Some 45 percent also said they expect 2013 to be better financially for them personally.

But for all the optimism, without action, financial progress in 2013 could fade as fast as the days of 2012.

The experts weigh in on what should top your to-do list in 2013 to shore up your savings and especially your retirement stash.

Pay yourself first

It's about you. Instead of paying bills and expenses first and saving whatever is left over, take the opposite approach. Set aside money for saving, retirement, college planning, debt repayment and then take care of everything else, says Scott Varon, a certified financial planner with MassMutual. “Your company retirement plan forces you to pay yourself first, since a percentage of your paycheck is automatically deducted. Implement this concept in other areas. It works.”

Quite simply, “Save until it hurts. If you're at 10% go to 12, if you're at 12, go to 15%,” says Mike Alfred, CEO of BrightScope, a provider of independent retirement plan ratings and investment research.

By all means, contribute enough to your 401k to get the employer match.

Make it easier to save

Set up direct-deposit into savings to up the odds of meeting your savings goals. Go a step further. “If you're tempted to raid the savings account regularly, consider setting up the account so that it requires two signatures to do a withdrawal,” says Bill Druliner, GreenPath Midwest regional manager. “Then you and a trusted friend would both need to agree that it was appropriate to take funds from the savings.”

Identify the areas where you are most prone to blow your budget. Decide to use cash for those purchases and limit the amount of cash you put in your wallet each week to the amount you've decided to spend. Psychologically it's harder to part with paper money than to swipe a credit or debit card, and seeing the amount of money available as a fixed, finite thing can help you control your spending says Druliner.

You can set up automated budget alerts, using your bank or credit union's website or service like Mint.com, he adds. For any purchase over $100, wait one week before buying. “This will determine whether you can live without it (and most cases you can.) It will also give you time to shop around,” says Craig Steinhoff, a certified public accountant with Hill, Barth & King.

You can save money by automating bill payment. You won't wrack up hefty late fees that add up over the course of a year. In addition, some lenders and utility companies will provide a reduced interest rate or other rebate for use of their automated payment services, says Kevin Gallegos, a vice president for the Freedom Financial Network.

Trade in your FSA for an HSA

If you're nearing retirement and use a FSA to help cover medical expenses, it may be time to ditch it and open a Health Savings Account instead, says Keith Mendonsa, consumer specialist at eHealthInsurance.com. Why? Due to a provision of health reform, FSA contributions are being limited to $2,500 in 2013. but you can use pre-tax or tax-deductible dollars from a HSA for the same qualifying medical expenses. You can sign up or apply for an HSA-eligible health insurance plan and open a HSA. The HSA contribution for 2013 is $3,250 for individual coverage or $6,450 for family coverage. Plus, if you're 55 or older, you can contribute an additional $1,000 in 2013. Unlike, FSAs, money in a HSA is yours to keep and will rover over and grow year over year.

“Think of it as a tax-advantaged medical savings account for retirement. Just make sure that you new HSA-eligible health insurance plan meets your coverage needs and budget. Don't cancel any current coverage until you're approved for a new plan,” says Mendonsa.

Expand your knowledge

Even if you think you're no amateur when it comes to finances, there's always room to learn more. There is a wealth of information available on personal finances. Many community groups, non-profits and credit unions have free courses available to learn about money management. Find out what's being offered where you live, or work your way through a variety of personal finance sites on the web. Vow to learn something new about money every month in 2013. Take advantage of any free financial education offered by your employer.

Get the most for your money

Switching your bank accounts can be a headache. Most people don't realize how many savings options they have, or that their money could earn higher interest rates elsewhere. But by doing a little homework you can find superior options through internet banks, says Raymond Quinlan, executive vice president of banking at CIT Group. “Without the need for brick-and-mortar real estate, Internet banks have a lower cost structure and they could provide a better interest rate,” says Quinlan. Look for an internet bank that is insured by the FDIC and that doesn't charge fees. While you might want a brick-and-mortar bank for your day-to-day cash, “take long-term savings to an Internet savings partner,” says Quinlan.

Also, if you have a standard checking account, realize options exist. Some checking accounts even offer daily compounded interest on checking balances. The Ally Bank's Interest Checking Account requires no minimum deposit, no monthly maintenance fees, as well as Ally Perks debit rewards program, with no sign-up or points to track or redeem.

If you make just one change in 2013 what should it be? Says Steven Smith, author of Money for Life – Successful Money Management and Financial Fitness in Just 12 Weeks, “Spending less than you make on a consistent basis is the key to reaching financial fitness and financial stability. You can't increase your savings, make investments, reduce debt or even make wise spending decisions if you're consistently overspending your income each month.”


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Comments
43 comments.
Comment #1 by Paoli2 posted on
Paoli2
Sheryl:  Interesting article but it seems to take for granted the readers are still working.  Many here are probably already retired and have committed themselves to the ideas listed.  For us, unexpected bills trying to help an adult child survive in these hard times can eat up a lot of our savings.  I can say no to spending on most of the ideas you set forth but I could never say no to helping my DD who needs us at this hard time in her life.

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Comment #6 by Anonymous posted on
Anonymous
I really don't know about some of you people. I think I've made a pretty concientious effort to "annoy" this past year & yet I don't receive even 10% of the antagonistic, mean spirited responses that Paoli2 cnsistently gets subjected to. I don't get it..............especially since none of what I've read from her is that controversial. 

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Comment #7 by Anonymous posted on
Anonymous
I meant conscientious, of course.

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Comment #9 by Anonymous posted on
Anonymous
I resent you calling me "common"! 

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Comment #12 by Anonymous posted on
Anonymous
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Dear Paoli2 - #11,

>> It takes "years" to get as disliked as I am on a blog.

Wow ... Surely you must have plenty of experience at being disliked on multiple blogs, for you to write so authoritatively. ... No?

Your Truly,

Anonymous

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Comment #13 by Paoli2 posted on
Paoli2
#12  No!  I am usually very liked, respected, and appreciated on other blogs etc. which I participate in.  I just got into trouble here by backing that so called "Saver's Petition".  I now stay away from stuff like that but certain posters have long memories it seems.   I do have some friends here but I participate for selfish reasons.  Ken's forum helps make my financial research a lot easier and I have learned a lot from many of the posters for which I give them my thanks and appreciation.  BTW, "Yours Truly" you seem to have a willing poster (#4) who is eager for you to attack him.  Why don't you show him how great you are at what "you" do in these blogs.

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Comment #14 by Anonymous posted on
Anonymous
Paoli2........Actually I haven't tried to pick a fight with you...............Let's face it, you've got enough enemies already & I refuse to be the type who "piles on". But thanks though for saying that I've irritated you.  It's much appreciated. :)

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Comment #15 by Paoli2 posted on
Paoli2
#14  Always glad to help a fellow poster and know it's appreciated.  Here's to another "irritating 2013" :)

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Comment #16 by Anonymous posted on
Anonymous
So much for love thy fellow man... huh trolls?   hehehe

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Comment #18 by Paoli2 posted on
Paoli2
Ok #17/ Yours Truly:  Let's start 2013 off with at least blaming me for the CORRECT problems.  Get your facts correct.  It was not my DD I was referring to cocerning the finances it was my DP!  Do you even know the difference?  One is my adult child  (DD) the other is my Spousal PARTNER (DP).  Why you even waste your time remembering those posts is beyond me other than to add fuel to the fire.  Why YOU think you can dictate to me or my DP how WE should handle our finances puts you in a category I can't reveal here.  It is none of your business what decision WE came to many, many years ago concerning any of our IRAs.   Do you really think I am so stupid I do not know what the RULES are for IRAS etc.?   I was referring to the fact that I am the beneficiary of his IRAS and where you got the idea that I was "staking a claim on HIS IRAS" is beyond me.  You seem to have a serious problem with reading comprehension.  My DP is still very much alive and is in no way incompetant.  Just because one spouse decides the other is more capable of handling all their finances in no way makes that spouse incompetant!  In our case, it was a very smart decision for him because I am the one who handles all the finances, taxes, IRAS, and RMDs for everyone in our family.  "I" was the one who took the time to research and study to make sure I do the best job I can for my family.  I may not be appreciated or liked in this group but I assure you I get all the appreciation I need from my family.

BTW, when I referred to whatever was his was mine was in reference mainly AFTER and only if he predeceses me.  I never realized people like yourself would take it any other way.  Common sense does not seem to be a part of your make up.

So let's put this subject to rest now that you know the real facts and not the confused ones you manufactured to aggravate me.  You have made it clear you are not one of my biggest fans so please don't waste either of our time posting to me in the New Year.     

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Comment #21 by Anonymous posted on
Anonymous
I like her!

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Comment #22 by Anonymous posted on
Anonymous
That is why I like her, I told her once not to feed the trolls and she remembered.

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Comment #23 by Anonymous posted on
Anonymous
However I will give you some advice Paoli2... don't be to free with your personal life on a blog.

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Comment #30 by Anonymous posted on
Anonymous
HAPPY NEW YEAR every one!

Looks like we'll be off to a good start???

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Comment #33 by Anonymous posted on
Anonymous
I didn't thing wishing everyone a "HAPPY NEW YEAR" was "****ing".  It may have been off topic, but "****ing"?  Oh well, it just goes to show, you can never please everyone.

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Comment #43 by Maecl posted on
Maecl
Paoli2, Ignore these people.  It's not worth the effort.

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Comment #44 by Anonymous posted on
Anonymous
So I read the thread in question & I still don't see why there's so much ill will towards Paoli2. After reading the exchanges I could easily see why anyone should/would be more irritated towards "Yours Truly" than Paoli................but I guess most here don't see it that way.

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Comment #45 by Paoli2 posted on
Paoli2
Ok #44 quit the game playing.  I know what you are doing and how you are doing it.  There is not so much ill will against Paoli, there is only ONE person who is playing this sick game using more than one IP and Avatar.  If you think I haven't been doing my homework, you need to rethink what you are doing.  You are ONE person pretending to be many to try to get others to join in with this cyber bullying you seem to enjoy.  I have more respect for the other posters than you seem to.  They know my posts have not broken any Comment rules as yours have and I have always tried to be as polite as I can even to you when possible.  YOU seem to need this attention and don't care what you say to get it.  I don't so I hope you come to your senses soon.  Ken works too hard for us with this forum and I won't allow you to coerce me into a flame war that can cause problems in this blog.  You have used several names in the past and I don't think I am your first prey from what I understand.  I hope I am your last!   Don't waste your time by these sick antics.  You can only have so many IPs and Ken can know them all.  You are not fooling anyone.  You must be the one without a life because I certainly do have one.

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Comment #46 by Anonymous posted on
Anonymous
Paoli2.........Check with Ken & he will tell you how wrong you are. I have NEVER impersonated anyone here & have NEVER used different or multiple IP addresses.  It's sad that you can't see past your paranoia to realize that I'm actually on your side,......................but you are really making it quite difficult for me to remain that way.  

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Comment #48 by Paoli2 posted on
Paoli2
#46 I may owe you an apology.  The one I am referring to is Yours Truly.  I stand by what I believe because there is one person who is using more than one IP and different Avatars to make me believe several posters are posting these posts.  I also received info that this isn't the first time this poster has been a problem but he/she has more than one IP and difficult to stop.  I have tried for the sake of this forum to ignore the poster but these daily jabs are a bit much.  Please reread #47's post above to me.  It is amazing how he/she remembers everything I write mocking my life and my family.

The poster's aim seems to be to drive me off of the blog but even if I don't post, I will still be here.  I didn't start this battle but I would like to end it.  #46  I truly apologize to you because I do think I confused you with poster Yours truly.  When I spoke to Ken about problems a while back, you were not involved in that matter from my knowledge.   However, I still think #47 Yours truly has a mission and one just has to read his posts to me to know what they are.  I'm sick of his trying to make me look like a nutcase and yet he spends so much time concentrating on my posts so he can throw them at me .   Thankfully, since I truly have important things to do now, I will take a rest from whomever it is who enjoys this sick game against me.  I need time to concentrate on more important missions.  

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Comment #47 by Anonymous posted on
Anonymous
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My Dearest Paoli2 - #45,

Whoa whoa whoa ... stop right there. As usual, you are venturing into gobbledigook about IPs and Avatar.  Get back to reality, and try to focus on your own words and try harder to understand what they mean and try hardest to understand what they imply.

In your own words ""It takes "years" to get as disliked as I am on a blog."

Can you focus on these words?  ... Try.

What do they mean?  Surely they mean that you are disliked and you know it.  ... Right?

What do they imply? ... Let me give a hint.  Maybe you need to chiil?  Maybe you need to change?  Maybe you need to reform?  ... Something on this line? ... No?


>> You are not fooling anyone.

Err ... I admit, surely I'm not fooling you.  You see, I find it rather hard to fool a person such as yourself, who already is an accomplished fool !!! *smile*


>> You must be the one without a life because I certainly do have one.

Your life?  Now what might that be? ... Oh yes ... that would be doing your "DP's" finances, healthcare and cooking.  ... Helping "DD" of yours who is in desperate fix.  ... Searching for CD deals by driving around.  ... Supporting some nonsensical petition. Did I forget anything? ... Ooops ... Yes I did.  ... Making some iilogical comments here knowing full well that you are passionately disliked here!

Does that summarize your life?

Yours Truly,

- Anonymous

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Comment #49 by Anonymous posted on
Anonymous
Paoli2.........Apology accepted. Like I've said on several occasions, I freely admit that I come here occasionally to have some fun & in the course of that fun, people are occasionally annoyed. But that is the extent of my actions. I've never "attacked" you or anyone else here & would never consider acting in that manner. I don't see any "fun" in that sort of behavior. 

 

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