9 Steps to Improve Your Finances in 2013

Via LearnVest By Emily Nickerson for The Daily Muse ~

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We’d all love to start the New Year with a big raise. But that’s not the only way to increase your cash flow or boost your retirement savings. If one of your resolutions is to improve your financial situation this year, consider these nine ways to make it happen.

1. Know Your Starting Point

If you’ve already got an established budget that you evaluate regularly, you’ve got this step covered. But if you’re like most, an annual checkup isn’t a bad idea. Review the money you have coming in and break down your spending.

If you’ve already been tracking your transactions, you’re ahead of the game. If not, start tracking now with an online tool like Mint or LearnVest, a spreadsheet, or simply on paper. Review at least three months of spending history to get a real feel for your cash flow.

2. Evaluate Your Largest Expense

For most, that’s probably your rent or mortgage payment. Consider your housing needs (which may have changed since you signed your lease or purchase agreement) and whether your abode (and its cost) are still your best option. It may be time to refinance your mortgage, search for a new apartment, or attempt to renegotiate your lease.

3. Plan Ahead

Emergencies tend to be costly, but they’re also often avoidable. Rather than ignoring the grinding sound your car is making or the cough that now seems to be on the verge of pneumonia, make sure to give your appliances—and yourself—regular preventative care. Make a list of the appointments you should make (mechanic, plumber, doctor) and get those on your calendar ASAP.

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improve your finances

4. Protect Yourself

In addition to preventative maintenance, you should protect yourself and your possessions with the necessary insurance. Sure, it’s not fun, and it may seem like an unnecessary expense, but when you need it, you’ll be glad you’ve got it. You should have renter’s insurancehealth insurancelife insurance, and car insurance to make sure you’re fully covered.

5. Set Up an Emergency Fund

Despite the best preventative measures, unexpected expenses still arise. So, most experts recommend that you have three to six months living expenses saved in case of unforeseen financial needs. Yes, that can be quite a sum to stash, but put away what you can—even $5 per week adds up over time. Figure out what you would need to save to feel financially confident in any situation, and set your savings plan accordingly.

6. Vow to Never Pay Another Late Fee

Late fees are basically money going down the tube. So set up direct deposit and automated payments for all of your bills to ensure that you never pay them late again. (And while you’re at it, set up automatic transfers to your emergency savings account, too!)

7. Make a Plan to Conquer Your Debt

It can be overwhelming to think about paying off college, medical bills, or credit card balances that spiraled out of control. But you don’t have to go it alone. There’s lots of advice (and inspirational stories) out there—just be leery of anything that sounds too good to be true.

If you need help getting out of debt, you can ask your bank or credit union for recommendations. If you’re looking for assistance on your mortgage, contact an FHA certified HUD counselor for free advice.

8. Get a Second Opinion

When it comes to your financial future—especially your retirement plan and investment options—it’s a good idea to get a second opinion from an expert. Many banks and credit unions offer this service free to their account holders, but you can also go with a trusted independent advisor. Online services like LearnVest can offer you guidance as well.

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Choose an advisor you’re comfortable with—one who listens to your concerns, makes sure you understand all of your options, and doesn’t push you for a quick decision. And don’t be afraid to speak up to ask a question or decline advice you don’t agree with.

9. Set a Fun Savings Goal

Finally, make your money work for you—so that you can enjoy it! Save up for the new computer you’ve been wanting or a vacation to reward yourself for another year of hard work. Splurges keep your budget from being boring and make you more motivated to cut costs elsewhere.

LearnVest is the leading lifestyle and personal finance website for women.