Personal Finance Resolutions for 2011

This is a guest post by Helen, an avid online shopper who prides herself on finding the best deals.

Every New Year is a new chance to break some bad habits.  For me, right after nail biting and procrastinating I think my worst habits involve my finances.  That’s why this year, instead of making an empty vow to go to the gym, I’m going to set some realistic goals to improve my finances this year.

Take advantage of Sales, Discounts, and Coupons

All the women in my family did it, and it’s time I quit being lazy and become my mom.  At least when it comes to clipping coupons.  We get coupon circulars all the time and I usually just chalk them up to junk mail.  But I really should pay more attention.  I generally buy things on sale anyway, but I imagine if I took the time and effort to routinely clip the coupons for products I need then I could save even more money.  30 or 50 cents off of anything may not seem like a lot, but it does add up.  It always just seems like too much of a hassle to cut along the dotted line.  But hours spent with idle hands in front of the TV could easily be passed with a pair of scissors and a stack of flyers.  This year, I’m going to turn my time into money.

I’m also going to take better advantage of online discount codes and seasonal deals (like after Christmas sales).  These are not my mother’s coupons.  I generally make it a rule never to buy anything online without searching for a discount code, but maybe I should start my internet coupon recon before I buy anything.  The truth is there are tons of online coupons that can be printed out and taken to the store.  It’s time I merged my cyber shopping savvy, with my real life.

Commit To My Savings

For the several years, I’ve kept thinking to myself that I really ought to put more money into my savings.  I can’t help but feel like I’m not alone.  43% of working people have less than $10,000 in savings.  I’m a pessimist; I always assume that when anything goes wrong it’s all going to happen at once.  Like I’m going to need a new roof, a new car and get a speeding ticket all in the same month.  And when everything does come crashing down for most of us, we’re going to be wiped out, or worse.  Instead of waiting for the rainy season to come and our bank accounts to go under, maybe while the sun is still shining we should start building an umbrella.

There are some small things we can do that can really add up.  Putting aside a little bit every month isn’t an original idea, but it feels so hard to part with even a few dollars, when money is tight.  That’s why it’s a good idea to set it up automatically so that you won’t even think about it.  Whether you set it up by talking to a person at your bank or pay bills online the result is the same.  A tiny amount will be taken from your pay cheque or chequing account each week or month and transferred to your savings.  If you never see the money you’re putting away, you may discover that you don’t even miss it.  Another good way to make a few extra dollars is to take the money in your savings and put it to work.  Short term GIC’s won’t make you rich, but they give you the safety of knowing your money isn’t tied up for years and you can make a few extra bucks.

Refocus On Retirement

My dad used to say that his dream job was retirement.  After working for a while, I get it.  The magic words for any working stiff are “early retirement” and for me it’s time I start thinking less about what I want to do someday and what I can do right now.  The same CNN article talks a lot about how many people are unprepared to retire, and that the majority of us haven’t even tried to wrap our brains around what it’s going to take to maintain our current standard of living.

While I have some semblance of an RRSP, it’s certainly not where I want it and odds are social security is going to fail us all when the time comes.  The real squeeze is how to improve a savings account while simultaneously growing my retirement plan?  If it’s tough to put $50 month aside for an emergency, how can you put a greater percentage of a pay cheque towards your RRSP?  The easy answer is you just suck it up and do it.  Eat one meal less a month at a restaurant and buy a few more generic brands at the grocery store, using coupons of course.  The harder answer, it’s different for everyone.  Maybe it’s holding an annual yard or garage sale and committing all profits to your retirement account.  Maybe it’s finding a way to save on auto insurance, or taking up an extra job.  Maybe it’s just becoming more aggressive with your investments.

The fact is, the younger you are the more risks you can afford to take.  If your retirement is a few decades away then you have more than enough time to ride out the rough years.  If you haven’t talked to a financial planner about how you want to retire, then maybe this is the year you have that conversation.  It’s not going to get you yachting off the coast of Couzumel at 65, but it’s a step in the right direction.