7 Financial Resolutions You Can Actually Keep

Follow these steps to put yourself in a better financial situation at this time next year.

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If you didn’t quite reach your budget goals last year, the new year is a great time to set more realistic goals and maximize those hard-earned dollars. As the effects of the recession are still dwindling, many Americans are feeling comfortable spending more. Still, many are carrying a heavy debt load and others are still struggling to make ends meet.

If you want to be in a better financial situation at this time next year, plan on making some financial resolutions you can actually keep in the new year.

[See 50 Ways to Improve Your Finances in 2012.]

1. Stick to a credit card-free spending plan. Whether you’re buying a few items at the convenience store or heading to the mall to hunt for bargains, adopt a cash-only strategy to break out of your debt habit. Cleaning up your spending habits will take some time, but you can start by paying for everything with cash. Forcing yourself to only spend cash and eliminating credit cards from your lifestyle will help you get your finances back on track this year.

2. Defer some of your wants. Everybody has a long “wants” list, but just because you have the money right now, doesn’t mean you have to satisfy that want. Learning to defer these wants and prioritizing your spending can make it easier to build up a savings account that earns interest income over the course of the year. Consider the motive behind many of those extra expenses. Are you just trying to compete with the neighbors? Are you trying to fill some other need with meaningless purchases? Consider how valuable that money will be when you have it at your disposal and can earn some type of return from it.

[See 6 Ways to Destroy Holiday Debt.]

3. Know what you’re worth. Take the time to create your own personal financial statement, or meet with a financial advisor to find out what your net worth is. A personal financial statement will break down the value of your assets, and can also give you a better idea of what your current debt load looks like, how much disposable cash you have available, and what types of investments are paying off for you. You’ll be able to make better financial decisions when you know your net worth.

4. Create a better budget. Having a budget is one thing, but actually referencing the budget regularly and keeping it up to date is what will help you keep your finances on track. Get into the habit of reviewing your budget at least once or twice per month, and make adjustments when expenses or income change. Use services like Mint and Adaptu to keep better track of your spending habits and to spot dangerous patterns. Create a more accurate budget this year so that you don’t end up overspending and dipping into a savings account. A little careful planning now will have a big payoff later.

[See 10 Ways to Give Your Money a Makeover.]

5. Take advantage of retirement-plan options. Make sure you’re taking full advantage of an employer match for IRA contributions and are able to make a significant contribution all year. This is a substantial benefit that only some people take full advantage of. Make a commitment to save for retirement with a steady but consistent saving strategy. Remember that this money needs to remain untouched until retirement or you miss out on all the tax benefits.

6. Maximize credit card benefits. If you use your credit cards responsibly and aren’t racking up debt, make sure you’re making the most of your credit card benefits programs and rewards. Perform a credit card rewards review to take a close look at any bonuses you could earn or points you can still redeem for goods, services, or cash in the new year.

7. Be better prepared for financial emergencies. Don’t let a personal emergency wipe out your savings and put you on the fast track to debt. Be better prepared for emergencies by building up an emergency fund. Open up a separate savings account if you have to so you don’t end up spending that money for any reason other than an emergency. Work toward saving an amount that is equal to six months of expenses to start with, then continue building on that.

Sabah Karimi is an award-winning Yahoo Contributor and a Wise Bread guide to making extra money.