New Year's Resolutions: 7 for Your Money

Last Updated Dec 6, 2010 12:23 PM EST

Americans apparently have a bit more confidence in their own financial health (as if we couldn't tell by the shopping stampede on Black Friday).

The evidence: A new survey by TD Ameritrade finds that 27% of us are less likely to make New Year's resolutions about our personal finances this year than last year, saying health and relaxing are more important. Rather than "save more money" - a common goal for 2010 and 2009 - Americans now say they feel confident enough to return to a more balanced take on life, to focus on their families, career and health, in addition to their finances.

While that sounds good, it's still important to save. And we don't have to sacrifice our health or happiness to do so. Here are seven money resolutions that can improve your mind, spirit and bank account.

1. Be More Charitable

Studies show charitable giving fell in 2010. Whether donating to charity or treating your friend to a cupcake, giving is not only thoughtful but can make you happy. A survey of more than 600 volunteers by researchers at Harvard Business School and The University of British Columbia concluded that spending just $5 a day on someone else would make you more happy than spending that money on yourself. Not to sound selfish, but how does this help our bottom lines? Well, there's always the tax deduction! Give to a legitimate charity and pay less to Uncle Sam on April 15.

2. Find a Money Buddy

It's key to have a partner in your financial life who can knock some sense into you when you feel the impulse to spend or when you are ignoring your bills. It might be your best friend, sibling, or parent. Relay your goals to this person so that he or she can help remind you of them when your judgment gets cloudy. Turn to them for advice. We often assume that our financial strife is unique â€" the sooner you begin networking and discussing your problems with others, the sooner you'll realize that others have been in your shoes and have persevered.

3. Stick to Cash
While it's important to maintain good credit and using our credit cards responsibly helps to achieve that, keep in mind that credit card users tend to spend more money than if they used cash. A recent Dunn & Bradstreet study found that people spend 12-18% more when using credit cards than when using cash. (Another study found that people who paid cash at the grocery store were healthier than their plastic-wielding counterparts.) And McDonald's found that the average transaction rose from $4.50 to $7.00 when customers used plastic instead of cash.

The other reason I insist on using cash is because it keeps us honest with our money. We make better choices because we are forced to think twice or three times about our purchases, especially if we have to break big bills like a $50 bill. Bye-bye, impulse purchases!
4. Create a Money Zone
This is all about staying organized and clear of financial clutter. Find a space in your home - it could be a table in your kitchen, sunroom, bedroom, wherever - and design this space so that you actually want to go there to set goals, pay your bills and deal with budgeting. Surround your "money zone" with images of your goals, family and inspirations - all the reasons you should stay motivated. Have folders for all your monthly statements. Have a safety box for secure papers like insurance certificates, your deed, etc. And have smaller boxes for business expense receipts and warranties.

5. Establish a Rule of Thumb

As humans, we like rules of thumb because they're handy. They help when we have trouble making decisions. We have diet rules of thumb - "no sweets during the week" or "no midnight snacking" - and they help us stay on track. Some good money rules could be: "I won't buy anything over $100 without consulting with my spouse or partner" or "No more open tabs at the bar!"

6. Automate

Save and pay your bills automatically. You'll sleep better at night knowing you did. It's less painful than taking money out of your paycheck yourself and depositing it in a savings account or handing it to your utility company. According to a recent survey by the Consumer Federation of America and the Financial Services Roundtable, 83% Americans say the most effective way to build personal savings is to automatically transfer funds from your paycheck to a savings account. Research also finds that people with the highest level of well-being had a high level of financial security. Many of them automated their payments so they didn't feel the sting of the pain of payments.

7. Turn a Passion or Pastime into a Paycheck

Who doesn't want to make more money in the New Year? One of the best ways to do that is to identify a skill or hobby that you're passionate about and turn that into a revenue stream - teaching a foreign language, designing web sites, making jewelry. When you work a job you love, it won't feel like work.

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Photo courtesy Husain Sani's photo stream on flickr.

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    Farnoosh Torabi is a personal finance journalist and commentator. She is the author of the new book Psych Yourself Rich, Get the Mindset and Discipline You Need to Build Your Financial Life. Follow her at and on Twitter at @farnoosh.