New year, new resolutions for personal finances

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There's a good reason January is Financial Wellness Month. With the new year still fresh with our good intentions, it's a great time to set some personal financial goals for the year. Here are a few suggestions to get you started.

Create a budget.
It's easy to lose track of where the money goes. It doesn't matter if you prefer to use money management software or pencil and paper—there are a lot of tools out there to help you create and track a budget. Mint.com is a good place to start. Or if you'd prefer, use our a simple fill-in budget sheet. Be sure to include specific short- and long-term savings goals and stick to your plan.

Build an emergency fund.
The more you can save in general, the better. But at the very least, you should set aside 3 to 6 months of living expenses to cover unexpected costs like replacing a water heater, repairing a car, or coping with a health problem. You don't have to do it all at once—just put away a small amount every month. Automating the process through your bank or credit union will make it even easier.

Avoid the credit card trap.
We all like nice things, and it's great if you can afford it, but credit cards make it very easy to overspend. Use cash instead of cards. To avoid buying on impulse, wait a day or two and see if you still really want that item; you might be surprised at how often you realize you don't. Working with a budget (see above) will also help you see what things you might be overspending on.

Know your credit score.
If you haven't checked up on your credit score lately, visit annualcreditreport.com to request a report from Equifax, Experian, and TransUnion. You can do this for free every 12 months. Sometimes errors happen with your report, and a periodic review will help catch problems early on. Having a good credit score will also help you get better deals on mortgages, cars, rent, and insurance. Good financial habits can help raise or maintain your score. (See our article, "The high co$t of a low credit score.")

Save for your future.
Open an IRA or 403(b). Avoid programs with high fees so that your money can work harder for you.

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