Money blogger J.D. Roth of Get Rich Slowly floated a great idea a few months ago: taking a personal "Money Day" to fix whatever's wrong with your finances.
Roth was inspired to write about the idea after taking a few hours off work to finally close his checking account at a much-hated bank and open one at a consumer-friendlier credit union. (For more on why switching may be a good idea, read "Ditch your bank for a credit union.")
"It was one of the best financial decisions I've ever made," Roth wrote. "If I could solve one financial problem in a few hours, just imagine what I could do with an entire day."
Think about it: Most of us have way too much to do and too little time to do it, so difficult or mundane tasks often fall to the bottom of our task lists. Because financial chores can be both difficult and mundane, it's easy to put them off indefinitely, even though doing so can cost us.
Wouldn't it be nice to stop telling yourself you'll fix your financial problems when you "have the time" and actually get it done?
You could continue trying to work such tasks into a regular day or use the 24/7 availability of many online resources to do it on a weekend. But Roth argued for taking vacation time from work and devoting an entire weekday to the task. Not only are you more likely to have access to all the resources you need, but using up a day of paid leave time helps up the ante -- you'll want to make sure the day pays off for you.
Focus on the biggiesHere are some chores you might check off your list:
Set up a high-rate savings account. Having a savings cushion is a great idea in any economy but particularly smart when a downturn may be ahead. Typical banks pay less than 1% on their FDIC-insured savings accounts, but online banks may offer several percentage points more. You can find the highest-paying institutions using the tool at MSN Money's banking center. Once your account is set up, you can arrange an automatic transfer from your brick-and-mortar checking account.
Start tracking your spending. If you don't know where the money goes, find out. You can:
- Carry a notebook and pen to write down every expenditure.
- Use personal finance software such as Money or Quicken to download your bank and credit card transactions into your computer. (Both offer free trials, Money for 60 days and Quicken for 30.)
- Try an online tracker like Wesabe, Geezeo, Mint or Quicken Online. The first three are free; Quicken Online charges $2.99 a month after a 30-day free trial.
Once you know where you're spending your money, it's easier to find places to trim so you can redirect the money into debt repayment or savings.
- Microsoft Office Online: Learn how to use Excel to track your banking and spending
Get a better interest rate on your credit cards. If you have credit card debt, paying it off should be among your priorities. That's easier to do if your interest rates aren't in the ionosphere. Read "Get a better deal . . . with a threat" for tactics that consistently win rate cuts for folks who have good credit. If your credit is bad or you've already fallen behind on your minimum payments, you may need to make an appointment with a legitimate credit counselor (read "The consumer's guide to credit counseling") and/or an experienced bankruptcy attorney to discuss your options.
Find a better rewards card. If you pay off your credit card balances every month, then make your diligence pay off with a card that matches the way you spend and the way you like to be rewarded. Read "The 15 most rewarding credit cards" to see which plastic leads the pack.