6/1/2012 5:57 PM ET|
Fix your finances in a day
It's easy to procrastinate when it comes to money chores. Here's a simple way to tackle what's not getting done.
Financial chores can pile up like dust bunnies under the bed.
When I asked my Facebook fans what money tasks they were putting off, they cited a laundry list of duties that were time-consuming and often grim:
● "I need to write an 'in case I'm dead' instruction sheet, but it's so boring I just can't make myself sit down and do it."
● "Updating our wills. We move frequently with the Navy and it somehow never makes the short list."
● "Our monthly budget . . . takes us a week into the month (sometimes longer) to get it done!"
● "Figuring out the magic number for retirement."
● "I've been putting off setting up a Roth IRA."
● "Review and redo family's financial plan now that we've satisfied one of our major objectives. Really don't know which 'back burner' item to bring forward first."
A personal money day
It's no wonder we procrastinate. Most of us live busy lives, and difficult or mundane tasks often fall to the bottom of our to-do lists. If something isn't actually on fire, we ignore it -- which can have serious repercussions for our finances or our families. You don't want to die without a will, screw up your retirement savings or waste money because you weren't paying attention.
I know the consequences -- and yet my own list of undone money chores continued to grow. Then, about five years ago, blogger J.D. Roth offered a solution: a "personal money day." Instead of trying to squeeze these chores around everything else, he suggested setting aside a weekday -- using a vacation day, if necessary -- to tackle the stuff that wasn't getting done.
Now, at least once a year, I take a day to do just that. I do it during the week, when banks are open, customer-service lines are fully staffed and my family is busy doing something else and doesn't need my attention.
Here's what I accomplished during my most recent fix-it day:
- Negotiated a $50 monthly reduction in our bundled Internet, phone and television bill.
- Rebalanced all of our retirement funds.
- Moved our daughter's college savings fund to a better 529 plan.
- Pulled my free credit reports from AnnualCreditReport.com.
- Reviewed our spending over the previous six months.
- Identified and eliminated $35 in monthly subscription charges for services we were no longer using.
On previous money days, I converted an individual retirement account to a Roth, saved hundreds of dollars a year by switching payroll tax companies and scheduled a bunch of free trips by cashing in frequent-traveler rewards.
Resources that will help
If you're ready to fix your finances in a day, here are some resources that could help you:
- Do a spending "autopsy." That's what Jeff Yeager, also known as the "Ultimate Cheapskate," calls the spending reviews he does occasionally to see where his money's going -- and how he might want to redeploy it. You can do it the old-school way, gathering up the last three months' worth of bank and credit card statements. Or you can use an account-tracking service such as Mint.com, which automatically categorizes your transactions.
- Find a better bank and switch. Getting fee'd to death? You can call around to local banks and credit unions to see who offers a better deal, or you can use NerdWallet's checking account comparison feature, which picks good choices based on how you use your account. Once you find a better option, "5 steps to switch your bank" will walk you through the process of changing over.
- Check your credit scores. You can get your free credit reports at AnnualCreditReport.com, but the scores pitched on that site -- and most other sites around the Web -- aren't the FICO scores most lenders use. To get your FICOs, you'll need to visit myFICO and cough up $20 per score. The scores come with detailed information about how you can make your numbers better. Knowing your FICOs will help you gauge what interest rates and rewards credit cards you might qualify for.
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