1. Where did all my money go?
At the end of every year, you should be seeing how you are allocating your income. How much of it goes to your savings account? How much of it went to those new Manolo Blahniks you’re wearing? If you simply don’t know where to begin, consider using Quicken or LearnVest. These web-based services generate charts to show an estimate of how you are spending your money. Not web-savvy? Keep a spending log in a notebook.
2. Start saving for Christmas NOW.
Set up an automatic-withdrawal savings account at your local bank. Or consider using SmartyPig- an online FDIC-insured bank. You can set up withdrawals to be as little as $25/month! After 12 months, you’d have $300 to go toward holiday expenses. With SmartyPig, you can also choose to redeem the money you saved on a gift card to one of your favorite merchants. What is the benefit? Merchants tack on an additional 1%-10% (depending on the retailer) to the gift card as a bonus.
3. Understand your debt.
An important follow-up question is to ask if the things you are investing in are providing a return. Going into debt because you have a shoe-obsession is fiscally irresponsible. Going into debt because you went to a prestigious university and got a great education is a good kind of debt. You are investing in yourself and in your future.