1. Reevaluate your banking
Send your guy and your kids to see the latest blockbuster at the multiplex. Wait another day to return that holiday gift that doesn't fit. You're going to put a couple of hours to good use: It's money-makeover time! Now, this makeover may not sound as exciting as one that involves a spa facial, but it has its own kind of charm: It's profitable. These New Year's to-do's can save you more than $30 a month in fees alone, while putting you on track to save much more.
40 minutes; annual savings: up to $400
The bank that wooed you with gift cards, enhanced interest rates, and other perks may not be your best option anymore; in fact, it may be costing you - big-time - to keep your cash there. Find out by reviewing your previous three to six months' worth of bank statements. If you haven't saved them, as I always do (what can I say? I'm a financial columnist), you should be able to find them online. Check how much you have been paying in fees. You may see basic account-maintenance charges (about $10 a month is average) and plenty of other costs. For example, one major national bank charges $12 monthly if your balance is below $1,500 - plus, it bills you $2 for each use of an out-of-network ATM, and that ATM could bill you $3 more. So, if you hit the ATM twice a week, once at a non-network machine, you could be looking at $12 a month in flat fees plus $20 a month for ATMs, for a total of more than $380 per year.
Related: 125 Ways to Save Money
A quick peek at bankrate.com (a free site for comparison shopping for banks and loans) shows that for the same services, an online bank typically requires no minimum balance and charges no fees, and you even earn at least 0.2% interest on your checking account. No contest, right? (Here's how Ally Bank, one online bank, operates: You make withdrawals via ATM and deposits either by mail or electronically - if the latter, you scan the check to be deposited and transmit the image to the bank.)2. Scour your bills for any "gray charges"
20 minutes; annual savings: up to $300
I typically review my credit card statements several times a month. Think about adopting this habit (especially since most credit card companies now give you access to your account online). Here's why: During one recent review, I found a strange charge for $9.98 - I didn't recognize the vendor name, so I dug a little and found that I'd been signed up for a service that says it pays your bills if you're out of work. I say that I "had been signed up" for it because I sure don't remember registering myself! It wasn't fraud per se, but what's called a "gray charge." For instance, you may agree to a free trial of new security software only to notice later that you're being charged for a monthly service you weren't aware of (thank you, superfine print). If you don't catch these fees, they can add up; if you have a $9.98 and a $12.95 monthly charge hiding on statements for a year, you've spent $275.16 - for zip!
If you don't have the time to scrutinize your bills, sign up for a free service that monitors your statements for these gray charges, like billguard.com. Research indicates that this kind of service saves subscribers an average of $300 per year in unwanted charges.3. Assess savings strategies
25 minutes; annual savings: up to $1,000 - or more
Throughout the year, you need to set aside money for unexpected expenses (like gifts for the kids' birthday parties) as well as emergency funds and savings for college and retirement. Yet 64% of Americans would not be able to come up with $1,000 cash in an emergency, reports a recent survey by the National Foundation for Credit Counseling. What's more, nearly one-third of workers have less than $1,000 saved for retirement, and 56% have less than $25,000, says the Employee Benefit Research Institute.
Don't be a part of those scary statistics. Sign up to put at least $10 to $20 a month into a savings account for expenses that may pop up. Put a note on your calendar to double that amount in six months if you can afford to (saving $42 a month will reap you $500 in a year - enough to smack down expenses like car repairs as soon as they crop up).
And how about your emergency savings? With such a wobbly economy, you can really protect your household by putting aside cash for several months' worth of living expenses in case of a layoff or a temporary drop in income. Sign up to automate deposits into your savings account (start with, say, $50 to $100 a month) whenever you get paid. Maintain this account at a bank other than the one you use for your checking account and debit card so it's harder to access the money. Just make sure you won't incur a low-balance fee on your checking account, and keep enough of a cushion to avoid bouncing checks.
4. Retirement-savings review
35 minutes; annual savings: up to $1,000 - or more
In January, you should receive statements from your IRAs and 401(k)s that show the past year's activity. See if you're saving enough; try the retirement calculators at sites like kiplinger.com. Your 401(k) or IRA provider may have similar tools, too.
If you can, step up retirement savings. Let's say you earn $50,000 a year and are putting a 4% pretax contribution into your 401(k). That's $2,000 a year, and if you're lucky, your company matches this at 75 cents on the dollar, for $1,500. That means you'll sock away an annual total of $3,500. But if you raise your contribution to 7% (hey, it's only $58 more, pretax, from your biweekly paycheck), you'll save $3,500 plus $2,625 from the company, for a total of $6,125.
Also, review statements to see if the choices you've made for allocating your money are still smart given the financial roller-coaster ride of recent years. Head to morningstar.com for a free Portfolio X-Ray, a snapshot and risk assessment of where your money is invested. Enter information on where you've put your money (say, 10% in ABCD Growth and Income Fund, etc.), and you'll see easy-to-read charts to help you understand how well your holdings are doing compared to a popular investment approach. Of course, your needs may differ, but this analysis is a useful starting point.
Check that clock: Your husband and kids are probably about to return home. But guess what? In 120 minutes, you've taken control of your finances and set your course for savings. Happy New Year indeed!- By Carmen Wong Ulrich
More from Good Housekeeping: