(Wayne Brezinka / For The…)
With the economy still in the dumper and many of us feeling poorer, it's no surprise that many Americans have resolved to clean up their finances in this new year.
The trick is to set reasonable goals. Make those resolutions too difficult and you're sure to break them. Like dieters who vow to eat nothing but carrot sticks, spendthrifts who swear to pinch every penny are doomed to failure.
A better approach is to start with a few things that are so easy to fix that you'll stick with the program. You may be surprised how quickly these small changes can add up to real money in your pocket.
Kathy M. Kristof suggests 10 simple resolutions that can improve your financial position in the months and years to come.
Make your habit a treat
Most of us get into a routine, whether it's going out to lunch each day or stopping at Starbucks on the way to work (or both). Not only are these habits costly, but they are often so rote that we don't even acknowledge them.
If you make your habit an occasional treat, you'll save money -- and you'll appreciate it a lot more.
Consider what could happen if you turned your daily coffee run into a once-a-week reward. Going on Mondays would be a great little morale booster to start the workweek. Waiting until Friday would be a fine way to say TGIF. Or you could celebrate hump day every Wednesday with a cup of designer joe.
Let's say you do all of the above. Cutting back to even three days a week saves you about $8 (assuming you're buying a latte -- or a coffee and a doughnut). That's about $35 a month, or about $400 a year.
Don't drink coffee? Then save on lunch. Eating out can easily set you back $10 a day. Break up that routine with "pack-a-lunch Wednesdays" (or Tuesdays or Thursdays or whenever). Make it fun. Plan it as an outing. Because you're not waiting to be served at a restaurant, you can take a walk or eat at a park bench or by the library.
If you do both of these -- cutting out two Starbucks trips and just one lunch, which will save you roughly $800 a year -- you're likely to lose weight too.
Disconnect that phone plan
If you are over the age of 20, you are probably paying for both a land line and a cellphone. Do you need them both? If you do, consider using a free shopping service like BillShrink ( www.billshrink.com) to see whether there's a better deal on the cell service. But before you switch, call your existing providers and see whether they'll match it. More often than not, they will.
No better deals on the horizon? Spend 10 minutes asking your current provider a few questions, such as: Will you give me a discount if I have both land-line and cell service with you? Is there a plan that's better suited to my usage? I did this recently and shaved $15 a month off my phone costs. That's no fortune, to be sure, but it adds up to $180 annually.
Shop your home and auto policies
Once a year, every year, you ought to spend half an hour determining whether you can get a better deal on your home and auto insurance. (It can make sense to shop these together because many property insurers offer so-called multiple-policy discounts.)
The reason you have to shop every year is that insurers change their prices based on their claims experience, so the insurer that was the best bet two years ago may not be today.
California's Department of Insurance makes shopping relatively easy by providing price comparisons on the state website :// www.insurance.ca.gov "> www.insurance.ca.gov . These are particularly helpful for homeowner policies, because there's less price variation than with auto, where your price will depend on a dozen factors, including your driving record.
How much can you save? That depends on how good a deal you're getting now, but checking a sample $300,000 policy in Glendale on a 10-year-old home uncovered a price variation of $1,523 between the highest-priced insurer (Chubb at $2,192) and the lowest ( AAA, $669).
Be sure, however, to check the insurer's complaint ratio before you switch to be sure you're not paying less simply because you're getting an inferior product.
To check that, click "info" next to the insurer's name. That will take you to a page with a prompt reading "company performance and comparison data." Scroll down that chart to find the company's "justified complaint ratio." That's an indicator of what percentage of the company's customers are justifiably dissatisfied with some aspect of the company's service. In this case, you'd see that AAA's justified-complaint ratio is considerably lower than Chubb's, which could make you feel particularly good about the savings.
Our grandparents had a foolproof way of ensuring that they didn't spend more than they made: When they ran out of cash, they stopped buying things.
Banks have done a superb job convincing us that cash is old-school and that credit and debit cards are much more convenient and "safe" because you don't risk being robbed or dropping $20 bills out of your pocket.