Radical New Year’s Financial Revolutions

  • Time to play for keeps!

    Sure, hit the gym—that’s a fine New Year’s resolution, though, let’s face it, not terribly original. And yeah, you’ve probably promised to save more or spend wisely in years past, but what we’re talking about here is something far more intense. We’re talking about real change, people. It’s time to take the financial power back, and that means becoming a fundamentally different kind of person in some ways. Make 2010 the year you become a millionaire. Well, maybe not a millionaire, but make this the year you stop treating real cash like Monopoly money. Here’s how to get started. Photo Credit: Getty Images
    Stop spending money you don’t have
  • Stop spending money you don’t have

    Call your bank and have them turn off your overdraft protection for debit card purchases. Instead, tell them you don’t want them to allow any withdrawals beyond the amount in your account to be approved. Oh, and maybe you should actually start keeping track of how much money you’ve got on a day to day basis. Maybe you think it’s a lot to ask, but guess what. It’s not. It’s kind of sad and pathetic that people don’t do this on their own, but that’s the world in which we live. It’s pure laziness, but for you, my friend, it ends now. Suck it up. This is your money and you need to know how much you have at all times. Photo Credit: Piez
    Experts agree
  • Experts agree

    Julia Scott at personal finance blog BargainBabe.com plans to do exactly that in 2010. “One of my personal finance resolutions is to write down EVERYTHING I spend, from the occasional $1.85 coffee at Starbucks to the $156 extended warranty I'm about to buy for my computer. (It always breaks in the third year!) I use an iPhone app called Small Spend that is as bare bones as you get. It's basically a tool to get a list of purchases with the added capability of putting each expenditure into a category. Easy peasy!” she told us. Photo Credit: Jake Wasdin
    Stop using ATMs entirely
  • Stop using ATMs entirely

    It’s far too easy to get stuck paying ATM withdrawal fees. There’s one easy way to put an end to this practice. Stop using ATMs entirely and instead walk into the bank (don’t wear a mask) and make a freaking withdrawal. You might end up withdrawing more than you would otherwise because you can’t make it to the bank as often as you can to the 7/11 down the street, but you will save in the long run. As we recently reported, some of you may be spending as much as 12.5% of your withdrawal amount on fees in some cases. That is unacceptable; it’s your money, you shouldn’t have to needlessly surrender any of it. Photo Credit: stan
    If you must use an ATM…
  • If you must use an ATM…

    If you are one of those people who uses an online bank then you will have to use an ATM. Just make sure that your bank is reimbursing you for all fees, and beyond that you need to commit to limiting your ATM withdrawals to once a week. The bottom line: never pay a fee to access your own cash. ING Direct offers free ATM withdrawals at more than 32,000 machines around the country and E*Trade’s banking service has “unlimited ATM fee refunds at every ATM nationwide.” With options like those, why are you still paying $3 to $5 every time you need cash? Photo Credit: Getty Images
    Cut up those cards
  • Cut up those cards

    Cut up all your credit cards except for two. Keep one only for emergencies. The second card, which you may have to use on a regular basis, should be a charge card like American Express, which you have to pay in full every month. (Their new ZYNC charge card has a very minimal annual fee of $25, far less than their older charge cards.) As for the rest of your credit card balances, commit to paying them all off this year. Do whatever you have to do to make that happen. Sell your car. Eat ramen noodles all year. Sell plasma and organs. I don’t care, just increase your cash flow and pay them off. Photo Credit: The Consumerist
    No lost spare change
  • No lost spare change

    Get a piggy bank or a change bowl. Use it. You can save upwards of $40 per month by ruthlessly retaining your change, rather than letting it fall out or spending it at work vending machines. That’s nearly $500 per year. It adds up. Photo Credit: swimparallel
    Get rid of your wallet
  • Get rid of your wallet

    Let’s face it, your wallet is full of stuff you don’t need. Seven credit cards. An expired gym membership. Your scuba license. Photos of the ex. It’s time to slim down and only carry the stuff you need with you. One or two emergency credit cards, your insurance card, your driver’s license and cash. Photo Credit: shareski
    Start saving
  • Start saving

    Again, I don’t care what you need to do in order to make this happen, but starting today, you save between 15% and 20% of every dime you make. First, you’ll put away three to six months of living expenses, then you’ll start investing. Fuhgeddaboutit. If you have been putting off investing for fear of impending total societal breakdown, you can probably relax… for now. Do some research into exchange-traded funds with low expense ratios, or in large publicly traded companies that you feel won’t disappear overnight. You’ll have to do your homework. Jim Cramer suggests you spend an hour a week studying every stock in which you invest, and he’s right. You may want to hire a financial adviser, but that doesn’t absolve you of responsibility for doing that homework. (Of course, if I turn out to be 100% wrong and society does collapse after you put your money into the market, well, you’ll have bigger things to worry about than your cracked nest egg. Remember: aim for the head when trying to take out a zombie. And direct sunlight or silver bullets work best on vampires.) Photo Credit: artemuestra
    Don’t pay for what you don’t use
  • Don’t pay for what you don’t use

    If you never watch TV anymore because of your second job at Waffle House, cancel the cable service. Or at least try to get them to lower your rate using our tested strategy. If you still have a landline, but only use your cell phone, cancel service. If you still get that subscription to Model Railroader Magazine that you haven’t read since you lost your virginity, cancel it. If you haven’t lost your virginity, still cancel it. You get the idea. Cancelling unwanted subscription services could save you hundreds if not thousands of dollars each year. Photo Credit: schmilblick
    Don’t read
  • Don’t read

    OK, that’s a little extreme, but don’t pay for books. Older books and magazines where copyright protection has expired are often available, in full, for free online. Try searching on Google Books. If you want to read something that just came out, go to a library. They are heated, usually also have free Web access, and you will feel extraordinarily powerful (and retro!) asking the librarian to help you figure out something you would otherwise just type into a search engine. Cultivate your working relationship with the librarian, because he or she could also become the perfect lifeline, should you ever find yourself on Who Wants to Be a Millionaire. Photo Credit: shareski
    Don’t pay for media
  • Don’t pay for media

    We’ll take the “don’t read” tip even further: do not pay for any media whatsoever in 2010. Want to watch your favorite TV show or soap? There’s Hulu.com. Want to listen to some song you heard on the radio this morning? Grooveshark.com. Want to see what’s going on in the world? MainStreet.com. CNN.com. Google News. If saving money is a priority, why are you still paying for bird cage liner (aka “newspaper”) to be delivered to your front door each morning? The information printed on it is at least six hours out of date. Online news is market fresh, and usually free. Photo Credit: Getty Images
    Don’t drive
  • Don’t drive

    Cars are expensive—insurance, gasoline, those scented pine tree air fresheners. Take public transportation instead. It frees up more of your time, allowing you to review your accounts, consider investment strategies… and it saves you money. Plus, you may meet really interesting, time-tested Charles Bukowski types on the bus and subway. Such mentors will teach you Valuable Life Lessons. I pay $81 per month for an unlimited MetroCard: gets me anywhere I need to be in New York. This is significantly lower than the cost of vehicle ownership. Photo Credit: Getty Images
    Don’t pay for clothes
  • Don’t pay for clothes

    G.D. II (Great Depression 2, that is) has made certain things socially acceptable. For example, it is no longer “lame” to get free clothes from your friends if they a) don’t want those clothes or b) own clothes that don’t fit anymore. Posting on your Facebook page that you’ll take free clothes could lead to a serious fashion windfall of some kind. It’s better than paying for used clothes at a vintage store or consignment shop — those places aren’t as cheap as you would expect. Also, if you do pay for clothes, try this trick from Myscha Theriault, a blogger at WiseBread: "If we buy anything new, no matter what it is, something else has to leave the house. We actually started this to keep clutter under control and to not undo our downsizing efforts... So the things we have left are either extremely critical for functionality, or things that we really, really love." Photo Credit: iMorpheus
    Don’t pay for coffee
  • Don’t pay for coffee

    If you remember only one thing from this article, please let it be the compound power of free coffee. I have a caffeine need. Not an addiction, just a simple physical need. You are probably the same way. Assuming you go to Starbucks twice per day, that could be anywhere from $5 to $8 — before you count in whatever pastries you order as well. To be conservative, let’s say $5 per day. That means in a year you are spending $1,825 on coffee at Starbucks, before you consider the leftover change you place in their tip jar. That’s enough money to open a brokerage account at E*Trade. It’s enough money to take seven three-night cruises in the Bahamas. Drink the coffee at work. It may not be quite as good, but the price is right, and caffeine is caffeine regardless of how much you pay for it. On weekends, brew your own. Photo Credit: Gunjan Karun
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