Welcome to 2012!  It is a new year, and most people are thinking about a total body makeover.  That's right, it's time to start that diet and get back to the gym.  But I bet your finances could use a makeover too.  Now is a great time to take a close look at your financial situation, set some goals, and make positive changes to help you achieve financial fitness in the New Year!

Money Makeover for the New Year

Step 1: Set Your Financial Goals

Before you can reach your goals, you first have to figure out what those goals are.  Do you need to eliminate debt, start saving for retirement, or maybe buy a house?  These things won't happen on their own.  Start by putting your goals in writing, so you can make a plan to achieve them.

Step 2: Live Within Your Means

Creating a monthly spending plan is aboslutely essential to your Money Makeover.  Start by making a list of your FIXED monthly expenses (rent, mortgage, utilities, car payment) and your VARIABLE expenses (groceries, entertainment, "mad money")  Use this FREE BUDGET SPREADSHEET will help make sure that you don't forget anything. 

Now comes the "hard" part.  Keep track of your spending each and every day.  At the end of your first month, you will be able to see how well you were able to stick to your new spending plan and make adjustments as necessary.  Maybe you don't need as much for groceries as you thought.  That extra money can be added to your savings or used to pay more to your credit cards to help your reach your financial goals even faster!

Step 3: Stop Using Your Credit Cards

In step 3 you learned how to live within your means.  That means only spending what you make and NOT reaching for those credit cards!  If you are scared to cut up your credit cards, you can freeze them in a block of ice to make them very difficult for to use! 

Instead of using your credit cards, look to your budget and only use cash, checks or debit cards.

Step 4: Keep and Eye on Your Credit Report

You should check your credit report at least once per year. This is quick and easy at www.annualcreditreport.com. By checking your credit report regularly, you can easily find and correct any errors.  For more information on DIY Credit Repair click here -->> What You Need to Know About Credit Card Debt Repair

Get started on these first 4 steps to your Money Makeover for the New Year, and check back later this week for part 2!