50 Easy Steps to a Complete Financial Makeover

Americans say they want to save more in 2011; here's a plan for making sure it happens.


If you’ve given yourself ambitious financial goals for 2011, you’re in good company: Eight in ten Americans say they want to save more money by the end of the year, and six in ten are committed to developing a budget, according to the new Chase Slate-U.S. News Consumer Monitor.

[In Pictures: 12 Money Mistakes Almost Everyone Makes]

The good news is that revamping your finances doesn’t have to be painful. We’ve come up with a list of 50 easy steps to a complete financial makeover, based on interviews with dozens of financial experts, researchers, and consumers.

If you only have time for one step, then consider making it this one: Slowly increase your personal savings rate each month. The most successful savers profiled in Generation Earn started by automatically saving a small percentage of their income; Nicole Mladic, a 31-year-old communications director in Chicago, couldn't afford to put away a big chunk of her salary when she was in her mid-20s, so she started saving 2 percent. A few months later, she raised it to 3 percent, then to 4 percent, and eventually she reached her goal of 10 percent. Today, her net worth is more than $90,000.

Here is our complete list of 50 steps to a complete financial makeover:

 1. Decide on your big goals; if you need help identifying them, talk with family and friends.

 2. Share those goals with other people; it will help hold you accountable.

3. Automate your savings so you put away money each month.

4. Take time to reflect on the past year's good and bad money decisions.

5. Get rid of junk mail so you are not tempted to make unnecessary purchases.

6. Stop receiving E-mail sales alerts from your favorite retailers.

7. Negotiate one big-ticket item each month. Many prices, even at big stores, are flexible.

8. Get familiar with comparison and coupon websites such as PriceGrabber.com, BradsDeals.com, and Dealnews.com.

9. Budget by the year, not the month—research shows it's more accurate.

10. Keep a spending diary.

11. Take advantage of your bank's free tools.

12. Check up on your insurance to make sure you have enough.

[In Pictures: 10 Ways to Save on Big-Ticket Items]

13. Write a will.

14. Protect your privacy; only give out your Social Security number and other personal information when absolutely necessary.

15. Write down how much money you want to save by the end of the year.

16. Become a better cook.

17. Reduce your utility bills.

18. Use less energy through small changes such as adjusting your thermostat and turning off lights.

19. Use fewer products for household cleaning and personal hygiene.

20. Start making cleaning supplies from scratch; websites such as thesmartmama.com can get you started.

21. Find inspiration online through websites such as Wise Bread, The Simple Dollar, and Centsible Life.

22. Give yourself a stress test and make sure you have a robust emergency fund.

23. Work with family members to share expenses where possible.

24. Decide what type of investor you want to be; if you're like most people, you probably want to stick with low-cost index funds.

[For more money-saving tips, visit the U.S. News Alpha Consumer blog.]

25. Begin investing today.

26. Ignore the daily fluctuations of the stock market and check in quarterly instead.

27. Pay off your expensive debt, even student loans.

28. Choose the best credit card for you.

29. Improve your credit score.

30. Make a plan for paying off high-interest rate debt.

31. Run some numbers on retirement calculators provided by your bank or bankrate.com to see if your savings are on track.

32. Ramp up your retirement savings by a few percentage points.

33. Consider opening up new tax-advantaged accounts.

34. Rebalance your retirement investments.

35. Check in with the Social Security Administration to learn about your expected benefits.

36. Invest in your career—even when you're being frugal everywhere else.

37. Start earning extra money on the side.

38. Launch your own business.

39. Use social media tools to boost your career.

[See the 50 Best Careers of 2011.]

40. Develop a back-up plan.

41. Schedule creative time for yourself.

42. Consider asking for a raise.

43. Free up your time and energy by outsourcing chores.

44. Talk with parents and siblings about any support you expect to give to them in the future.

45. Choose a cause that you believe in.

46. Learn everything you can about it.

47. Look for free ways to give, too, such as blood donation or volunteer work.

48. Give better gifts; many people spend too much money instead of giving experiences such as a coffee date.

49. Clean out your closet; donate gently-used clothes, books, or CDs to charity.

50. Join forces with friends by forming a giving circle to leverage the impact of your money.

Kimberly Palmer is the author of the new book Generation Earn: The Young Professional's Guide to Spending, Investing, and Giving Back.