Strive for savings and financial health in 2010

If your New Year's resolution for 2010 is to get your financial life in order ... you're in luck. The next 12 months can be a year of savings and good economic health, thanks to some tips compiled from the National Foundation for Credit Counseling.

Keep an eye on spending
It's easy to overspend, especially when using a debit card or credit card. If expenditures aren't tracked along the way, it's easy to go way over budget. Write down every cent spent for 30 days straight or use an online money-tracking service like Mint.com. This will make it easy to tell where the money is going, and where spending can be cut.

Pay off your debt

Learning to live below your means is important, especially if there's debt to be paid. Adjustments will have to be made in order to live a life that is realistic given a certain income. Otherwise, you are headed down the hole of future financial trouble.

Avoid avoidance

Don't avoid or ignore financial problems. Deal with them immediately! The sooner the financial problems are dealt with, the sooner good finanical health will come in the future. Reach out for help, or talk to a counselor the first sign of financial trouble.

Talk with the family

According to a Detroit News article, keep your decisions regarding money all in the family and your likelihood of success will increase dramatically.

Always have savings

If a credit card is the only form of savings when a financial emergency strikes, the chances are the bill will not be able to paid back. Add to a savings account monthly... even if it's only $20. The savings will add up, and credit card won't.

Make a strict budget

Keep your budget tight. By allocating an amount of money to each spending category, you will spend money to your best advantage.

Set a financial goal

Plan ahead ... not just for the next day. Setting short and long term goals are important in defining an end result, and clearing a path in order to get there.

Earn a clean bill of financial health

The current recession has put a renewed focus on the importance of building household savings. Although even the most basic changes to consumers' behavior can have a positive impact on their financial health, there are five things nearly everyone can do to save more:

1. Treat saving like a monthly expense. Set aside a designated amount such as $250 or $500 per month and put it in a savings account at the same time as other bills are paid so the money is never missed. If possible, arrange an automatic monthly transfer between accounts to make saving even easier.Contribute the maximum amount to retirement accounts. If a matching program is available through your employer, contribute as much as possible to benefit from their program.


2. Keep investing despite volatility in the market. Putting money in at regular intervals over a long period of time should help to generate more consistent returns than trying to guess which markets or sectors will be successful in the short-term.


3. Plan ahead to make strategic decisions about when to begin collecting Social Security. For couples in particular, it may make sense for one partner to begin collecting benefits before the other. In addition, it's never too early to start planning the best ways to turn assets into income in the future.


4. Create a budget. Although it may require some time initially, a detailed budget can be a very effective way to learn more about each monthly expense. Simply knowing where your paycheck goes each month can help you make better decisions about how to cut back or reallocate your spending.

--Bridget O'Sullivan