2. Automate – but pay attention. Most people benefit from a relatively hands off approach to their savings. Set it up so your employer pulls money out of every paycheck and deposits it in your 401(k), or allow your IRA provider to deduct a set amount from your checking account. That way, you don’t have to make the decision to save. But that’s where the automation should end. You need to look at those investments once in a while and see that you’re on track. Make part of this year’s resolution about rebalancing your investments, either right now or on your birthday.
3. Put a windfall to work. Right now through the first few months of the New Year are ripe for windfalls. You might receive an end-of-year bonus, raise, or a tax refund. The best thing you can do with this money is pretend you never received it. Funnel a bonus or tax refund directly into savings, without giving yourself a chance to spend it (if you’re carrying credit card debt, use this cash to pay it off or make a solid dent in your balance). When you get a raise, bump up your retirement contribution to match the increase in salary – research shows that otherwise, you’ll adjust spending to the new amount and hardly feel like you’re earning more.
Read:Obama’s Favorite Late Night Joint
Financial Freedom: 3 Money Tips To Start 2012 Right! was originally published on elev8.com
