Get organized
Start by putting your goals in writing and setting short-, mid- and long-term milestones to help you stay on track. As part of your plan, develop a budget or review the one you already have to make sure it accommodates your resolutions. Have a system of keeping tabs on your finances, your bills, and your spending. Be sure to review your bank balances so that bills are covered and that your savings commitments are funded.
Spend less to save more
Sure, you’d like to increase your savings — but where will those extra funds come from? One solution: cut back on spending. Start with non-essentials like impulse buys or that daily caramel latte. Then review your monthly bills to spot other potential reductions. Next, look for ways to save on what you do need: Clip coupons, turn down the thermostat to reduce energy expenses, plan your grocery list around weekly sales and so on. Keep track of what you save and put that money towards your savings goals. Using recurring transfers through online banking or automatic contributions to your investment accounts can help ensure the money gets safely tucked away before you have a chance to spend it.

Manage & get out of debt
In some cases, it may make financial sense to use savings to pay off debt altogether, in other cases it may not make sense to accelerate debt but rather save to pay it off in full. For instance, if you earn 1 % on a money market account, but face 10 % interest on a credit card, paying the card balance with the money market is like getting a 9 % return. Once the debt is gone, take the money you would have put toward credit payments to rebuild your savings. Sometimes paying extra on a debt will not save you much interest, and it puts you in an illiquid position that may cost additional debt later. Make sure you have reserves, and have a plan with your debt, not just indiscriminately throw money at it.

If you have debt and you’re taking the month-by-month payment approach, be sure to pay more than the minimum each month. And, if you have multiple debts, prioritize them, focusing financial resources on getting one paid off at a time, starting with the lowest balance & highest interest-rate debt first. You should also consider transferring your debts to lenders or credit card companies offering lower interest rates. In the meantime, stop racking up more debts if you don’t have to. Your credit cards are not a license for you to buy stuff you can’t really afford, so use them wisely and only for emergencies.

Stop spending unnecessarily
It is important to see the difference between stuff you would like, versus things you really need. Take stock of all your expenses, and categorize each one. You can save a lot of money by formulating a stricter definition of the word necessity, and foregoing potential luxuries. For this step to work, you will have to develop some type of self-discipline. Make a physical list every time you go to the grocery or to the mall for everything you need to purchase; this should prevent you from making impulse purchases. If you see anything that isn’t on your list, don’t buy it. Larry Burkett used to say: “before you buy something you want, get 3 quotes for the item and wait 30 days before purchase . . . you probably won’t remember what you wanted.”

Another unnecessary expense is when you pay more than you have to for a product or service. Try to apply for any discounts whenever you can, and go online and search for websites which offer significant price reduction for the items that you need to buy. Be warned, however, that discounts can be very dangerous—you may be tempted to purchase discounted items you don’t really need. Again first check your list to see if an item is something that you need to buy.

Get some supplemental income
With the economic climate as it is, you probably wish you had more sources of income than you currently have. A lot of people these days are actually working two jobs, although the employment landscape in many areas may make it difficult for some to have even just a single job.

However, there’s a way to easily supplement your income, and that is to sell some of your stuff you don’t really use or need. Take stock of what you own, and determine what you can live without. You can have a yard sale in your area, or you can go online and offer them for sale or for auction. Either way, you get rid of unnecessary stuff, gain some extra space in your home, and gain extra money.

Get professional counsel
Many times, all you need is some objective advice, accountability and professional counsel. This process enables you to focus and really work at something we often neglect . . . our finances.
Please call Jeff for a no cost, no obligation financial review to get prepared for 2014. You can request a free copy of 2014 Investor’s Almanac of Market & Economic Forecast, just email Jeff.

Jeffery Masters is President of Jeffery W. Masters & Associates and a locally endorsed investment advisor by Dave Ramsey. Reach Jeff at [email protected].