With all of the holiday madness now behind us, you can carve a little time out to consider what you want to accomplish this year. Things will be different, no doubt. Even with a compromise being reached for the fiscal cliff, it's likely to take a bite out of your budget. With that in mind, consider the following five financial tips to maintain a healthy budget during the New Year, in spite of an ailing economy:
1. Eliminate Credit Card Debt. The average American carries close to $7,000 in credit card debt. If you're among this group, make a commitment to pay off your debt. You already know that the money you spend on interest is simply wasted, and that some sacrifice will be required to become debt-free. But what you may not realize is that this sacrifice is only temporary. Review your monthly bills and spending habits and cut back wherever you can. Once your balances are gone, you can continue your austerity measures, or you can relax and put some of the surplus back toward the things you enjoy. Just make sure never to charge more than you can afford to pay off at the end of the month.
2. Save More for Retirement. Most Americans don't have enough money stored away by the time they reach retirement. Money's already tight, but with a little creativity and effort, you can start saving for retirement today. Clip coupons to save on groceries and adjust your thermostat to reduce home energy expenses. Every dollar you save is truly a dollar earned, and also another dollar you can devote towards your retirement.
3. Reduce Monthly Bills. Break out your monthly billing statements and review them for fees you didn't know you were paying. Contact your provider to find out why they're there, and do whatever you can to get them eliminated. Don't hesitate to mention switching companies--it just might do the trick. See if you can scale back your cell phone plan and TV channel package as well.
4. Start an Emergency Fund. An emergency fund is a must-have in the current economic climate, where the unexpected can derail your finances if you aren't properly prepared. Cut back on personal spending and build up a fund with at least six months' worth of living expenses. This will financially prepare you, should you experience unemployment or a different setback.
5. Improve Your Health. A heather lifestyle means fewer medical bills. Plus, the better you feel into your later years, the easier it will be for you to keep working. If it's eating less, eating healthier, exercising, or all of the above, start thinking of plans you can implement to improve your health.
Final Thoughts. Even if you develop feasible financial resolutions, you'll have a hard time achieving them if you don't map out a plan. Write your resolutions down and set 30-, 60-, and 90-day goals to ensure that you stay on track. Also, consider rewarding yourself (modestly) for staying on track and achieving your resolutions. Setting financial resolutions for next year is a great idea, but it will be an exercise in futility if you don't make a commitment and set a plan to achieve them.
What financial resolutions are on your docket for 2013?
David Bakke is a contributor for MoneyCrashers.com, a personal finance blog that helps readers stay on track with their long-term financial goals and New Year's resolutions.