Start 2012 With $1,700 More In Your Pocket

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Make a New Year’s resolution to start 2012 richer.

In fact, don’t wait until the ball drops in Times Square to start. If you get moving now, you can have $1,700 socked away before 2011 is even over.

It’s just a matter of re-framing old clichés that are so 2007.

Like, “Show people you love them by buying them nice gifts,” and, “The holidays are time to indulge.”

Do yourself a favour: use these 6 tips to give yourself the gift of health and perspective this year, along with the satisfaction of being $1,700 richer by January 1.

1) Make a Holiday Budget — And Cut It by 25%:

According to the National Retail Federation, the average American household spent $681 on gifts in 2010. So, 2011 is the perfect year to start a new holiday tradition — restraint.

I’ve heard many creative ways to cut down on the number of gifts you feel obligated to buy: agreements among siblings to skip the gifts to each other, “secret Santa” arrangements so that one child buys just one present for another child, spending limits, etc. In fact, my family does all of these things.

Here, communication is the key. Call a family meeting and explain your idea to cut back this year. Make sure everyone involved agrees to play by the new set of rules. Your brothers, sisters and cousins will thank you.

At least $170 richer by January 1

2) Get Paid for Starting a New Checking/Brokerage Account:

Many banks offer bonuses just for opening or transferring to a new account. For example, Chase (NYSE: JPM) offers $125 bonus for new customers who have their paychecks direct deposited into their new Chase account (expires 11/26/11). Citibank (NYSE: C) is also offering a few deals for opening new checking accounts before 2012: $200 for opening a new “Citibank Account” and $400 for opening a new “Citigold Account” (expires 12/31/11).

And if you’re interested in buying stocks or ETFs, Sharebuilder offers $100 to transfer your account. The best part — there’s no account minimum or maintenance fees.

Up to $500 richer by January 1

3) Pick Up a Second Job:

A seasonal job won’t pay much, but probably won’t require too much effort either.

Working an additional 16 hours per week, even at minimum wage, could put an extra $371/month into your pocket. A temporary stint of picking up a few four-hour shifts per week won’t seem like such a huge sacrifice if it means extra cash to spend on holiday gifts (or yourself).

If you put those extra earnings into the stock market and let it sit for 20 years, it could potentially turn into more than $3,600 — assuming an 8% rate of return. Leave it for 40 years and it could turn into more than $18,000. That’s not bad for only two months worth of extra shifts!

At least $742 Richer by January 1

4) Downgrade Your Cable, Internet or Telephone Package:

Earlier this year, my husband and I went cold turkey and cut the cable altogether. We bought an antenna from Best Buy (NYSE: BBY) for $30 and watched nothing but local channels for six months. We saved $140 a month, which added up to a ridiculous $840.

Looking back, I can’t believe we ever paid that much for TV. We’ve since re-subscribed (cut me some slack; it’s football season!), but at a more reasonable rate of $41 a month.

The point is, we all splurge on luxuries that we eventually regard as necessities. Are 600 channels necessary? Not anymore, at least not for us. Between phone plans, cable packages and internet service, I’m certain that most people can cut at least $50 a month and still have an acceptable standard of living.

At least $100 Richer by January 1

5) Slow Down:

Think about this: You’re paying an extra 20 cents per gallon every 5 mph over 60 mph that you drive! According to an Edmunds.com study, drivers who incorporated slower highway speeds, slower accelerations and coasting instead of braking saw a 35% increase in fuel economy compared to more aggressive drivers.

If you’re an aggressive driver, changing your habits adds up to savings of $586 per year — or $98 in the last two months of 2011.

Up to $98 richer by January 1

6) Up Your 401(k) Plan Savings Rate:

If you work somewhere with a 401(k) plan matching program you don’t yet take full advantage of, you’re leaving easy money on the table.

In a 401(k) matching program, your employer will match the amount you contribute to your 401(k), up to a certain point.

For example, let’s say you make $40,000 and your employer matches your 401(k) contributions. If you up your savings rate from 0% to 1%, you’ll contribute $33 to your 401(k), and your employer will match your $33. That’s an extra $33 a month that you don’t even need to work for! Your combined $66 a month in savings will flow straight through to your stash of savings.

Assuming you continued putting that combined $66 a month into a 401(k) invested in stocks, your nest egg could grow to over $100,000 in 20 years time — assuming an 8% annual return. 

If you don’t have a 401(k) match or if you’re already maxing it out, commit to saving 1% more of your salary each year. It can be deposited straight into that new savings account you opened in Tip #2.

At least $132 richer by January

The Investing Answer:
Resolve to build your stash of savings in 2012. It’s the first step on the road to true wealth and financial independence. Anyone, and I mean anyone, can do it with a simple combination of financial resolve and self-control. And most people have the ability, if not the will, to save enough to retire as a millionaire. Our Million Dollar Savings Calculator will even show you how long it will take you to accumulate that first $1,000,000.

This post originally appeared at Investing Answers.

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