How to Take Control of Your Money in 2011

Earn more interest, set targets, and think twice about those automatic savings.

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There are two philosophies related to control that have allowed me to be moderately successful and happy throughout the past few years. I worry about only what I can control, and this has allowed me to stay calm in stressful situations and handle the worst that has been thrown at me. At the same time, I have come to realize that more of my life is within my control that I would have thought. Taking control of my money has helped me relax, and here are some suggestions for making this work for you.

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1. Un-automate your finances. For most people, automatic services have helped grow bank accounts. Your employer deposits your paychecks into a checking account automatically. Your bank pays your credit card bill automatically on the due date. Software like Mint.com watches our transactions and we rely on alerts from banks if our savings balance dips too low or our credit card spending soars too high. It may be time to take an active interest in your finances again. Review your spending and question your choices if you haven't thought about your expenses in a while.

2. Take an inventory. You can't determine where you're going without knowing where you are. This is key to being in control of your financial future—understanding your financial present.

3. Set financial targets. Any MBA can tell you about SMART goals. Chances are you've heard about those. I like to focus on major life goals or personal missions, and only setting shorter-term goals that relate directly to that type of birds-eye view. To take control of your finances, you'll need some achievable targets by which you can check your progress throughout the year. This could be the year you get out of debt or the year your net worth crosses $100,000. Money isn't a goal itself, but since it does help you achieve other goals you have for yourself, set targets and track your progress.

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4. Earn interest. There are two sides to every interest story. If you're not in control of your money, you pay interest to other people through your loans and credit cards. Although high-interest savings accounts aren't doing much for savings right now, earning even 1 percent in your cash is better than paying 15.99 percent to a credit card company. When you owe money, you cede some control to another party, so get out of debt as soon as possible.

5. Rebalance your portfolio. Most people decide how they want their portfolio to look, with a certain percentage in stocks and the rest in bonds, for example, when they start investing. This is how many 401(k) plans work. Over time, different investments will perform differently, and your personalized mix will change over time. If it's been a while since you evaluated your portfolio and determined if the mix still meets your goals and risk profile, it may be time to rebalance. If your stocks have outperformed, they may have grown from 70% to 80% of your overall investments. If that's the case, sell some of the investment in stocks and buy more bonds to get back to your initial design.

6. Don't forget the fun. If you are in the habit of saving, investing, and if you have debt, paying it down, then you're in a good financial position. When you are in control of your money, you have the ability to spend money as you see fit. Living life now is important, too, because you never know when something truly outside your control will take that opportunity away from you.

Luke Landes writes for Consumerism Commentary, where he encourages discussions about money and consumer issues. Consumerism Commentary regularly tracks and reviews the best credit cards and other financial products.