5 Financial Tips for New Year's 2013

Financial expert Michelle Perry Higgins says that when it comes to personal finance, we can make New Year's resolutions that actually stick. "The problem with keeping them is that it's easy to fall back into familiar patterns," she says. "Finance is the lifeblood of the household, so I advise strategies that I know my clients can easily achieve."

Ms. Higgins shares her top five New Year's resolutions that she believes nearly everyone can accomplish.

1. Become a Smarter Shopper.
   "Before you go to the supermarket or the big-box store, make a list of what you need and only buy those things," Ms. Higgins says. By sticking to your list, she says you can avoid purchasing things that waste money. "You'll be amazed how much you'll save." She also says to be wary of certain coupon offers. "It's only a bargain if you already use the item in the coupon."
   
   
2. Start a Rainy Day Fund.
   Ms. Higgins has a simple solution for putting money aside for unforeseen circumstances. "Most banks have the ability to take a fixed percentage of your direct deposit and allocate that to a savings account. You probably won't miss a 5% deduction, but it will pile up quickly." She recommends that the account not be linked to your regular checking account and that you do not get an ATM card issued. "It will grow faster if you don't have easy access to it," she says.
   
   
3. Contribute to a Retirement Savings Plan.
   If you're not already enrolled in some type of retirement plan, Ms. Higgins strongly advises you do so. "You may be missing out on matching funds from your employer," she says. "That's like leaving money on the table. Find out how much your company will match if you contribute to your retirement saving plan, such as a 401(k) plan." She advises saving at least the percentage that your employer matches.
   
   
4. Enhance Your Financial Knowledge.
   According to Ms. Higgins, taking a few minutes each day to read the financial section of the newspaper could change your money outlook for the better. "A little exposure to the financial world can yield big dividends," she says. With the wealth of information available on the Internet, she says that the task is even easier. "The better understanding you have about the financial world, the more control you will have over improving your own outcomes."
   
   
5. Keep Your Eye on the Prize.
   Ms. Higgins says that you can't get where you want to be if you don't know where you're going.  "It's important to sit down at least twice a year to review your goals and measure how far you have come."  Most importantly, she cautions to not be overwhelmed by your finances. "Take baby steps to move in the right direction."

Michelle Perry Higgins is a financial planner and principal of California Financial Advisors. For more information please visit www.calfinad.com.