Your Financial Action Plan for 2012

New Year’s Eve has always been a time to reflect on the past and more importantly, set goals for the upcoming year. There is nothing that I want more this year, than for you to take action to live and finish rich in 2012. That’s why I am giving you an easy to use financial action plan for the New Year—so let’s get started!

1) PAY YOURSELF FIRST 
According to a new Fidelity Research Report, the number one goal of American’s is to double their savings in 2012. What I want you to do is take out your 401k statement and either increase the dollar amount or increase the percentage of your contribution.  If you just change it by 1% this year, you will make a positive impact on your financial life and savings. Making this increase to your savings is the single easiest thing you can do right off the bat for 2012.

2) MAKE YOUR FINANCES “AUTOMATIC”
2012 is the time to use technology to your advantage when it comes to your finances. The best part about automating your financial life is that it can be done in less than an hour and it will save you time and money for years to come! You need to start by making sure your paycheck is directly deposited into your checking account. Then by using online banking and bill pay you will distribute your money automatically into the following key accounts:

1) Retirement Savings
2) Emergency Savings
3) College Savings
4) Dream Account (i.e. vacations, holidays savings)
5) Mortgage Payment 
6) Credit Card Bills (minimum payment, so you will never miss a payment again) 
7) Recurring bills (utilities, phone, cable, etc.)

3)  GET A WILL  
It’s reported that over 50% of American’s do not have a will.  The reality is, everyone needs a will, even if you are not married or don’t have kids.  Think of your family and friends that you would want to receive your life’s work. Many people do not realize that making a will can actually be quick and relatively cheap. You can create a will yourself for as less $50, using a program such as Quicken Will Maker or you can hire an attorney to help you.

Critical things that you will need in your will are:
- Health care directive
- Financial power of attorney
- Executor documents
- Final arrangements

4)  TRACK WHERE THE MONEY GOES “AKA FIND YOUR LATTE FACTOR®”
The best way to improve your financial life that I know of, other paying yourself first, is to track where your money is actually going.  I would use a site like Mint.com , or Yodlee Money Center.  They have the best programs online to track your expenses and they use the same encryption system the banks do, so your information will be safe.  If you don’t want your expenses tracked online then you can go get an old school “budget tracker” workbook and keep track of where your money goes each month. Then review your finances to see what you are wasting money on or spending too much on and then stop that specific spending!

5) CLEAN IT OUT AND SELL IT
January is a great time of the year to clean out everything in your house that you don’t need and then sell it or give it away—especially if you have a storage facility.  If you are paying to store things you don’t really use and realistically will probably never use now is the time to get rid of everything! Doing this one act could save you over $1,000 a year. What you can do to help yourself, is to look up companies in your area that will come photograph and sell your unwanted items for you, saving you time and making you money.

I would like to say, that this is my personal, number one, New Year’s resolution to help me save in 2012. In fact, you can mark my words that I will get rid of my storage facility this year!

6)  GIVE SOMETHING UP
One of the fastest ways to cut your expenses in 2012 is to pick ONE thing and give it up. We all hate to do it at first, but once we make the change, we usually find out it’s not the end of the world and can be completely worth the savings.  For example, you can give up a car. For many families this can cut expenses by $5,000 to $10,000 a year! If you don’t think you can give up your car, really think about it, what can give you up?  What are you paying for each year that you truly could try and live without?  Is it your storage facility?  Is it premium cable?  Is it a cell phone?  Is it a second home?  A vacation you ALWAYS take?  Sometimes just deciding to give up “one thing” can completely change your financial life. Then these savings could be used to pay down your debt, OR save for retirement, emergency purposes, college OR all of the above!

What I want you to remember is that you don’t need to have a doctorate in math to get these things done; you just need the motivation to make a positive financial change in your life. Trust me—it will be worth it! To connect with like-minded people and get support on your journey to live and finish rich join my community on Facebook or follow me on Twitter.

Finally, for all of you that voted for me as your favorite expert of 2011, THANK YOU! Your votes have pushed me to 2nd place in the poll and now I need your help getting me to 1st. To vote now, click HERE.

Live Rich,

David Bach

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My 5 Quick Tips to Get Financially Fit in 2012

Heading into the New Year everyone wants to know, what they can do to get financially fit–fast! Well, here are my five pieces of financial advice for 2012 …drum roll!

1) PAY YOURSELF FIRST. That means the moment you earn a dollar, you direct at least the first hour of income in the day to a retirement account (like a 401k plan, IRA, Roth IRA or SEP IRA).

2) SAVE MONEY AUTOMATICALLY. That means that everything you save for yourself, make the money move automatically. You have your earnings deposited automatically for you, and it’s moved automatically at your bank into the various savings accounts you set up for retirement, emergency, college savings, home etc.

3) PAY DOWN YOUR DEBT. If you have credit card debt, rather than worry about investing right now focusing on paying the credit card debt down. Go to http://finishrich.com/dolp/ and download my tool to help you pay down your debt or go to Debt Wise which is a site I promote with Equifax that helps you pay down your debt -automatically, saving you time and money (in interest) in the process! Debt reduction is the key to financial security and freedom…so get serious about paying it down in 2012.

4) REFINANCE YOUR MORTGAGE FROM 30 YEAR TO 15 YEAR. If you can afford to make extra payments on your mortgage – do it! If you are really ready to get serious about being debt free, refinance from a 30 year to a 15 year mortgage. The rates on mortgages are the lowest that we have practically ever seen, and now is a great time to do this.

5) GET SMART FINANCIALLY. To me the best investment you can make financially in 2012 will be in your own financial education. Learn more, read books, take classes,  and make sure to tune in to NBC’s TODAY show – Money 911 each week, visit the section of today.com … make learning about money a priority,  learning everything you can about YOUR MONEY, what you own and what you can to invest. Financial education is a MUST in 2012!

Live Rich!

David Bach

 

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