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Six Sensible Financial Resolutions for the New Year

Traditionally, resolutions are made and started in the new year. But why wait? Start now and you will feel greater accomplishment.

  • Pay down (or pay off) your credit card debt. Are you paying just the interest? Put together a plan to pay off all your cards and resolve to always pay them off in full, every month. Use these online calculators to help: Federal Reserve Calculator or Bankrate Calculator.

    Tip: Once you have accomplished this, don't be tempted to use them. Cut up all but one - keep the one that has the lowest interest rate and provides rewards.

  • Create a budget and stick to it. Commit to write up (on paper or electronically) a monthly budget with your expenses and income. Start with the necessities such as rent or mortgage, utilities, auto payments, and food, and include an amount to put in savings (see below). A budget will help you distinguish between a need and a want - a need is keeping the lights on, a want is all-the-frills cable.

    Tip: Do not wait to do this - start now and have it done by Jan. 1.

  • Start an emergency fund. Build three to six months' worth of necessary expenses and continue to grow it. The savings comes in handy when life hands you a financial surprise. It costs less to use your fund than your credit card or a loan.

    Tip: Pay yourself first and opt for an automatic deduction from your paycheck directly to a savings account. Start small - $25 - and build up.

  • Open a retirement account - even if you are in your 20's. Most people under save for retirement. If you have a 401(k) through your employer, bump up your regular contribution to the amount your employer matches. Get more information from the Internal Revenue Services IRA Resource Guide.

    Tip: Put an appointment on your calendar to visit your human resource department by Dec. 31. While you are at it, consider other types of investments as you will want more than one egg in your retirement basket. You can go it alone http://www.cbs.state.or.us/external/dfcs/consumer_info/financial_planning.html or you can get help from a financial professional http://www.cbs.state.or.us/external/dfcs/securities/before_you_invest.html.

  • Organize all your financial information, including insurance documents, in folders, notebooks, or anything that helps you retrieve it when you need it. Make sure your family or trusted friends know the location of your important documents, such as a list of savings, checking accounts, and health and life insurance records.

    Tip: Many office supply stores have clearance or "blow out" sales right after the holidays for organizational items. You can organize and save money at the same time.

  • Get your credit report. Go to annualcreditreport.com or call 877-322-8228 (toll-free) to get your report from the three nationwide consumer reporting agencies (Equifax, Experian, and TransUnion). It is free and you are entitled to one from each agency every 12 months. By reviewing your reports, you may find discrepancies or mistakes that affect your credit score. A lower score means you may pay more in interest rates and insurance.

    Tip: Some financial advisers say staggering your requests - asking for one report every three months - may be a good way to keep an eye on the accuracy and completeness of your report's information. For more information, visit this Federal Trade Commission page.