Smart Money Moves

We know how New Year’s resolutions usually go. You start (barely), then you stop (suddenly). But when it comes to your financial future, you can’t afford to be complacent or to procrastinate this time around. You need a solid plan to take control of your budget and start putting the right steps in place to make more money, cut expenses, pay off debt, start investing and relieve stress. To get you on the right track in 2014, we’ve compiled 11 savvy money moves. Don’t think of them as resolutions; view them as must-do solutions for your financial health and well-being for both you and your family.

1 | Create a clear financial road map
“Could you find a friend’s house if you didn’t know where you were leaving from?” asks Hilary Martin, a financial adviser at the Family Wealth Consulting Group in San Jose, Calif.  “If you don’t know your personal net worth and monthly financial obligations, you are putting yourself in that same disadvantaged situation,” says Martin, who also blogs at healthywealthyfamilies.net. Use Mint.com or another free, online financial aggregator to link your accounts, track your spending and understand your starting point.”

2 | meet with a financial adviser
Get Professional Help with setting your money goals. Stacia Pierce, founder of The Women’s Success Conference, says you should start with a question: “Where do I want to be financially next year?” Then follow up with, “How can I multiply my streams of revenue? And how can I save more of what I’ve earned?”

3 | shop smarter
Being a savvy consumer is one of the most prudent financial moves you can ever make. “Never shop without a plan. Write down a list of intended purchases to limit impulse buying,” says Alexey Bulankov, a certified financial planner at McCarthy Asset Management. “Decide whether it’s a need or a want. Then research online to compare prices.”

4 | Get paid what you are worth
Very few things are as frustrating as sitting at a desk knowing you aren’t making the money you should be. Pierce suggests using sites such as salary.com, payscale.com or glassdoor.com to research comparable salaries for your experience at comparably sized companies. If you think you are underpaid, start documenting your raise-worthy achievements.  “Make a note of all of your rock-star moments at work,” she says.  “It’s one thing to feel like you are doing a good job and want a raise;  look at it, however, from your employer’s perspective, and ask yourself where you, according to your company and your boss’s standards, have outperformed what was expected and been an above-average asset to your company,” Pierce notes.

5 | Increase the value of your home
Invest in upgrading your landscaping. Experts say improving your home’s curb appeal with enhanced landscaping can immediately add thousands of dollars to the value of your property.
6 | create multiple revenue streams
Brainstorm ways to earn extra cash outside of your job with both active and passive income streams. For example, can you teach classes locally or online in your specialty area? Or if you build up an emergency cash reserve, you can park it in a high-interest savings account and earn income on it.

7 | Set concrete and specific objectives
Reducing debt is as ambiguous a goal as losing weight. Don’t fall into that trap. Be specific and use action words and complete phrases: Vow to “move your 401(k) to an IRA by end of quarter” instead of just “consolidate savings,” says Harrine Freeman, founder of H.E. Freeman Enterprises, a credit counseling agency based in Bethesda, Md. “Use dates, times, amounts, etc., so you will know when you have achieved a goal and will see the benefits of the goal,” she says.

8 | know your retirement number
How much will you need to retire comfortably?  Go to socialsecurity.gov to get an estimate of your retirement benefits. Then, use a handy retirement calculator such as one found on the AARP.org website. Consider this: Savings of $1 million in retirement would provide about $50,000 for 20 years, so you can aim for that. Make sure you haven’t left any 401(k) accounts with a previous employer. Mitch Tuchman, co-founder and Managing Director of Rebalance IRA, suggests rolling over old company retirement plans into a single individual retirement account (IRA) at one of the major brokerages.

9 | Improve your credit score
You are entitled to one free credit report every 12 months at annualcreditreport.com, so you can review your report and check it for errors. Then consider spending $55 to also get your FICO scores from all three major credit bureaus at myfico.com. Those are the scores lenders will use to determine your creditworthiness. Try these savvy tips: “Set clear goals for reducing your credit card balances,” says economist and financial analyst John-Paul Valdez. Keep your credit card balances low. Most experts suggest a balance of 30 percent of your total available credit. “But don’t close accounts you have paid off, generally speaking. Keep three open lines of credit beyond your home and car. Always pay more than the minimum.”  Paying your bills on time, maintaining little to no credit card debt and applying for credit judiciously are all great suggestions for boosting your credit score, notes John Ulzheimer, a consumer credit expert at CreditSesame.com. “Be patient,” he says. “And don’t try unproven or so-called ‘instant’ techniques to improve your scores. That is dangerous, and you may actually harm your scores rather than improve them.”

10 | invest smarter
One of the savviest moves any investor can make is to use dollar-cost averaging. That means systematically investing the same amount every month into your mutual fund or investment account. This ensures that you buy more shares when they are cheap and fewer shares when they are
expensive. The new year is also a good time to rebalance your portfolio, check for underperforming funds or any increase in fees and adjust accordingly.

11 | get ample life insurance
A recent study showed that although 85 percent of respondents agree most people need life insurance, only 62 percent of those surveyed actually have that coverage.  To figure out how much life insurance you need, experts suggest considering how much would be required to cover final arrangements, mortgage debt and education expenses for your children and replacing at least 50 percent of your income until your children are finished with school or your spouse dies. Try a life insurance calculator at bankrate.com. And get a quote for term life insurance at accuquote.com.