Money Under Your Futon

The start of the new year is the best time to start tackling some of the your financial goals that may have fallen to wayside during the year.  Here are some of my top five that you might consider adding to your list of resolutions.

1. Check your credit report: Go to www.annualcreditreport.com to order your free credit report online.  According to federal law, you are entitled to a free copy of your credit report (but not your credit score) each year from each of the three major credit reporting agencies – Transunion, Experian, and Equifax.  You can order all three at once so you can compare or one every four months so you can monitor for any suspicious activities.
2. File your taxes early: The early bird gets the worm.  And the earlier you file, the faster you can get your refund.  You can go to the IRS website to learn how to file on your own, go to a paid preparer, or have an IRS-certified volunteer prepare your taxes for free.  (Call 1-800-906-9887 for the nearest VITA site.)
3. Start a rainy day fund: A tax refund is a great way to start one.  A rainy day fund is essentially a savings account where you will set aside a little money each money and earn a little interest.  The key here is accessibility and liquidity.  The rainy day or emergency fund should be something you can get to quickly.  But you don’t want to use your checking account where you can withdraw money anytime of the day with just an ATM card.
4. Fund a retirement account: If you company has a 401(k) plan, check to see if it offers matching.  If it does, you should start contributing.  And if not, you should open your own Roth IRA account and contribute on your own.
5. Improve your financial record-keeping: Create an organization system so that all your papers are in once place. Use different files for different categories, such as bank statements, credit card statements, tax returns, insurance policies, credit card receipts, medical care expenses, anything car-related, anything house-related, etc.  And then sort through your documents each month accordingly.  It does not necessarily have to be very neat, but the system will allow you to at least locate documents quickly and nothing will be misplaced or thrown out.  And when in doubt, hang onto to a piece of paper.  It is easy to throw things away but much harder to get them back.  And finally, I recommend keeping documents for up to three years, which is the usual limit if any tax or legal questions come up.  But personally, I like to keep things as long as I can.

And whatever your resolutions and financial goals are, MUYF wishes you a happy and healthy 2011!