Starting down the Road to Financial Fitness

Next to weight loss, financial fitness is one of the most popular resolutions made each new year. If shrinking your financial footprint and improving your bottom line are part of your 2016 plan, here are five tips to help you get started:

1. Most people know the best way to lose weight is to burn more calories than you take in; financial solvency comes when you spend less money than you bring in. Start with low-hanging fruit: eliminate expenses that add no value to your life, such as late fees, unnecessary or duplicate purchases, excess interest on debt. Spend your money on the things and experiences that truly enhance your quality of life.
2. Eliminate waste. Put extra holiday cards, wrapping paper, and bows where you can find them next year so you won't have to re-purchase as much. Turn your thermostat down as far as you can stand it to save energy. After all, it's winter, so put on a sweater instead of running around the house in shorts.
3. Eliminate clutter. How many times have you bought an item when it turned out you already owned something similar? How much food has to be thrown out because it was forgotten in the back of the refrigerator until it rotted? Take inventory of what you have, and get rid of what you don't need. If you received gift cards this holiday season, use them promptly. Exchange items that are the wrong size or otherwise unsuitable. Donate usable unwanted items to charity for a tax write-off.
4. Speaking of taxes, it's time to start organizing your paperwork. Make sure you take advantage of every deduction or credit for which you are eligible by locating receipts and ensuring that mileage logs are up to date. If you have a refund due, file as soon as you have all the necessary documents, such as W2s and 1099s. If you must pay the IRS, you can wait until the beginning of April to file your return, but at least it will be ready so you won't get stressed out--and perhaps owe a penalty for filing late.
5. Get started on investments. If your employer has a 401k plan or similar, contribute as much as you can, certainly up to any company match. Think about contributing to an IRA (Individual Retirement Arrangement) as well. If you can't fund the whole allowable amount at once ($5500, or $6500 if you're over age 50), some institutions will let you contribute in installments. And it's not too late to open an account for 2015; you have until April 15 to make that contribution.

Small adjustments to spending and wealth-building habits add up over the long term, and they stick better than a crash-diet-style change.

What resolutions have you made for 2016? What tips do you have for keeping them?

Live Cheaply, Be Happy, Grow Wealthy