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5 tips to kickoff your financial new year

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As is so often the case, the rush of the holiday season, with the travel, the parties, and the presents, leaves us with little time to truly reflect on the year we've just completed.

Then, before we know it, we're back to the daily hustle and bustle and underway with a new year.

Regardless of how you feel about the previous year, 2014 is upon us and it's important to have a plan be successful.

If you're like most Americans, you've probably made your fair share of resolutions about exercise, dieting, money, and spending time with family, among other things.

To get you started on the right path financially for 2014, here are five easy things you can do jump start your new year:

Tip #1: Set up an automatic contribution every month from your checking account to a dedicated savings account to build your emergency fund

This one is pretty simple. One of the very first things everyone needs to do in building a successful financial plan is to have a dedicated emergency fund with a minimum of three months of living expenses saved up. The money should be placed in a safe, liquid account (like a savings or money market account) that can be easily tapped if an emergency arises.

Tip #2: Shop your car insurance to see if a competitor offers a lower rate or better coverage

Often, consumers can increase their coverage and simultaneously lower their premiums by several hundred dollars a year by simply getting quotes from a few other insurance companies. If you find better rates from a competitor, talk to you existing insurer and see if they can match it. If no, consider a switch.

Tip #3: Review your investment expenses and understand what you are paying

Most investors pay a host of unnecessary fees, whether in their 401k or IRA, or in purchasing investments from a broker. If you're not sure what you're paying, you're probably paying too much. High fees can rob you of tens or hundreds of thousands of dollars over your investment lifetime.

Tip #4: Review your cell phone bill and current plan

Are you paying for 6gb of data, but using 500mb? Do you and your family have 4 individual plans, when a family plan might be a smarter choice? Check your bill to understand exactly what plan you have and how much you are paying. Then check your usage. If the two aren't lining up very closely, change your plan so that you are only paying for what you need.

Tip #5: Pay down high interest debt ASAP

If you are carrying credit card debt at 18% interest, there is no better place to put your money to work then by paying down your debt. All too often when we have extra cash laying around, our first that is that we need to invest it. With no credit card debt, that would probably be a wise move.

However, no investment currently on the market offers a guaranteed return of 18% with no risk. That said, paying down high interest debt offers the same effective return by avoiding accruing additional interest.



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