This time of year there is much spoken and written about resolutions, plenty of it humorous and quickly forgotten. Losing ten pounds, exercising more - I'm not going to do that myself so I have no critique to offer in that department. But this is a great time for a brief annual review of your personal finances. It doesn't have to be boring or painful, and there's no need to perspire. Here's step one:

  1. Spend less - save more.
Yes, it's no secret, you already know this. It's like "eat less, exercise more." But what not to eat, and what exercise to do? Start with the spend less part. Try looking back at your online banking, credit card statement, or checkbook (do you still have one of those?). If you don't have a good record of what you spent, keep notes over the next few weeks. Ninety five percent of people are surprised by how much they spend. Don't get me wrong - it's your money and you should spend it as you wish. It's just that you are almost certainly spending more than you think you are. Coffee, lunch, drinks with friends, gifts for family, one extra cashmere sweater; it adds up faster than you think. If you go through this exercise and are happy with what you spent and how you spent it, great, you're all set. If you find that you spent more than you thought, you'll have the raw material in front of you to determine where you can save a little. Saving just $3 per day - $21 per week - adds up to over $1000 per year.

In my next post I'll detail a tax cut that starts today and can help you save painlessly this year.


(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).