We all know the song: “…two turtle doves and a partridge in a pear tree.” Right? Sounds festive, but we got to thinking that in this economy, how helpful is a vast collection of birds, musical instruments, and “ladies dancing” anyway? So we made up our own “12 Days,” complete with one tip per day for getting your finances together during the holidays and beyond. Be sure to check back for the tip of the day!
Money in a T. Rowe Price Account. The best way to make your money grow is to invest the same amount in a mutual fund every month. This ensures you’ll buy more shares when they’re cheap and fewer when they’re expensive. We like T. Rowe Price’s Automatic Asset Builder program, which lets you contribute as little as $50 a month to nearly any of its funds — and sneak under the usual $2,500 minimum initial investment.
Two copies — of everything! If you’ve somehow gotten this far in life without backing up your hard drive (which more than likely holds most of your most important files and documents), 2013 is the time to make it happen. If you’re an Apple fan, it’s now easier than ever to sync everything from your tax documents to your music across multiple devices with iCloud. If an external hardrive is more of your thing, we like the Seagate Backup Plus. It’s super slim and packs more than 1TB of memory — and comes in a variety of fun colors so you won’t forget to use it!
Three Credit Rating Bureaus: Your credit score is a number reported by various credit bureaus. The biggies are Experian, TransUnion, and Equifax. They all use different algorithms to calculate your score, and so have slightly different credit ranges, but most credit scores fall between 300 and 850. Anything around 700 is considered good. (Wait — what’s a “credit score,” you ask?? We’ve got you covered here).
Four Fiscal Quarters: Setting goals for the new year might seem daunting, so break them up and plan to tackle a few goals each quarter. Use the first part of the year, Q1, to get organized. This means organizing all of your important documents in a safe place and gathering up the materials you’ll need on tax day; believe us, when April 15 draws near you’ll be glad you did! For Q2, focus on filing your taxes and making the most of your refund. In Q3, you can move on to a solid student loan and credit card payment plan — just in time for back to school! And toward the end of the year, in Q4, make your annual calls to cable and internet providers, leasing agent, etc to negotiate rates for the coming year. You’ll have your fiscal house in order by 2014, easy peasy!
Five Dollar Bills: This year, find creative ways to save a little dough each month. Try our game “Lucky 5′s” by putting every $5 bill you get back in change into your savings account. You never know when the cashier is going to hand one over, and it will turn saving into a game! Whatever your method of choice, try to set aside 10% of your monthly paycheck each month for savings.
Six Uses for Gift Cards: Got a few gift cards during the holidays that you don’t plan on using? Don’t leave them to wither way in your desk drawer! Your first option is to use a site like GiftCardRescue or SwapAGift to trade them for gift cards of the same value. Don’t see anything you like? CardHub, Plastic Jungle, or LivingSocial are great for auctioning off unwanted gift cards. You probably won’t get the exact face value back, but it’s better than collecting unused gift cards. Some charities, especially those that offer donations in-kind (offering clothing or homeware, for example) will also accept gift cards as a donation. Regifting is always an option, especially for those cards which may not be for you but someone else would really enjoy. You could also use the card for something practical (gasp!) like groceries, work clothes, or kitchen appliances. And finally, for #6…save it! With the new rules that passed last year, gift cards can’t expire for 5 years. Cha-ching!
Seven Surprise Tax Deductions: We’ve talked about this one before: it’s amazing what you can deduct from your taxes nowadays! Be sure to take your time looking through the year’s expenditures, especially when it comes to small business and charity work. You could be up for more money back from Uncle Sam come April — and what better holiday gift could you ask for than money in the bank??
Eight Wallet No-Nos: It may seem like a good idea to keep all of your important materials on your person at all times, but don’t. Just, don’t. Not only does this make you more susceptible to identity fraud, but it will also mean that much more of a headache if your wallet is stolen (cancelling multiple credit cards and getting a new social security card? Ov vey!). Here are the top eight culprits to remove from your wallet and store in a safe place now: checks, social security card, passport, spare keys, birth certificate, multiple credit cards, password cheat sheet, old receipts. Bonus: a lighter load for holiday shopping!
Nine Financial Lives: No matter how carefully you manage your finances, you’re bound to make some mistakes — and maybe some big ones at that. Remain calm…and whatever you do don’t let one mistake cause your entire financial picture to spiral out of control. With some sweat equity and a few slices of humble pie you can bounce back! Missed a credit card payment? Suck it up, pick up the phone, and call your credit card company. There may be more available options than you think — and you may even get a real human who understands you on the line! Bombed your credit score? Start building it back by applying regular, modest payments to a new card, and preferably one that reports to all three credit bureaus. Splurged on new shoes? Pay down that credit card payment first, and then cut back on your “fun money” budget for next month. The important thing is: don’t just sit there and stress about it. Take action!
Ten Money Words You Think You Know — But Don’t! Hedge: Hedging is a fancy way to say insurance. If you hedge a bet, you make sure something is there to back it up if it fails. Short: It just means that you think something is going to fail or go down. So if you “short” a stock you think it’s going in the crapper. Equity: A stock is an equity. Period. It’s a fancy word to talk about stock or portion of a company you own. Bond: You also hear it as “fixed income” or “paper.” It’s buying a portion of debt in turn for a percentage of profit. AAA: You get a credit score, so does a country. That’s a way to tell the risk of that particular country. So when you buy a “bond” that’s not AAA, which is the highest, it has more likelihood of failing. Valuation: How much is a company worth now? How much is it going to be worth in the future? Seed Money: As cheesy as it sounds this is the seed to make your company grow. Itʼs the initial dough your friends and family shell out to get you started. Sweat Equity: The effort, or “sweat,” you put into start your company; youʼre not paying someone else to do the same thing, which saves you money and also increases the equity or worth of your company. Venture Capital: This comes after seed money. And if you need it, itʼs not “selling out” but you are relinquishing control of your idea to take money from a Venture Capitalist or a Venture Capital firm. Roadshow: It’s not as obnoxious as a typical traveling act, but similar. Itʼs taking your show (presentations, elevator pitches) on the road.
Eleven Cheap Ways to Stay Fit and Healthy: You don’t need to shell out a ton of dough to take good care of yourself. Buy in bulk: Hit up the bulk goods section at your grocery store for items like nuts, dried, fruit and granola and watch your savings pile up. Shop in season: Get the greatest nutritional value and best deals by shopping for foods that are in season. Better yet, stop by your local farmer’s market for farm-to-table goodies! Sleep it off: Cheap earplugs and eye masks, found at most drugstores, are a low-cost way to get those sweet dreams throughout 2013. Roll with it: Use a tennis or softball to roll out sore muscles after a workout. Get pumped: Some colorful socks or bright shoelaces are just the thing to liven up your workout gear without spending tons of money. Stay on track: Download a free workout log or calorie-tracker app to keep track of your progress and stay motivated. It’s a wash: Alternate the hot and cold water in your shower to alleviate soreness and remove toxins post-workout. One great song: Treat yourself to a new jam every time you meet a fitness goal — it will be $1.29 well spent! Get buzzed: Studies show that downing a cup of Joe 30-60 minutes before you hit the gym can actually make your workout feel easier. Multitask: Calf raises while you brush your teeth? Leg lifts under your desk? Free and efficient? Yes, please! Give thanks: A daily gratitude journal is a great way to maintain perspective, especially when you’re busy and/or stressed.
Twelve Months in a Year: Don’t set yourself up for financial failure by trying to tackle everything right away. Instead, set a specific, quantifiable, and manageable goal for each month, such as “this month, I am going to organize my expenses” or “this month, I am going to open a new credit card to boost my credit score.” Working your way through one goal at a time will give you a bigger sense of accomplishment and keep you from feeling daunted by a total fiscal makeover. Plus, you’ll be more organized from one month to the next which will make every subsequent goal easier and faster to overcome!