My Sunday Washington Post Business column is out. This morning, I discuss ten easy to follow New Year’s resolutions that will make your finances better.

The print version had the charming headline Get smart!: 10 financial resolutions you can actually keep.

Here’s an excerpt from the column:

“It’s that time of year, when many people resolve to be better: Gotta lose 20 pounds, stop smoking, start exercising. Human nature is such that come January, there will be a 20-minute wait for the elliptical machines in the gym . . . and by mid-February, that wait will drop to zero minutes.

Resolutions are usually a terrible way to effect change. Changing habits involves changing your lifestyle, and that requires a deep commitment that most of us lack.

If you’ve resolved to get your financial life in order, I offer 10 important and easy-to-do steps. None is groundbreaking, but they are all too easily overlooked. If you do all 10, I guarantee that you will be better organized and more aware of your finances. That will lead to better decision-making and lower levels of economic stress.”

Following that are the 10 numbered resolutions, along with a brief explanation of each.

Note: I wrote this to be simple, accessible and easy to follow. I am sure there will be some exceptions to each of these points, so think of them as general principles.


10 financial resolutions you can actually keep
Barry Ritholtz
Washington Post, December 29 2013

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

9 Responses to “10 EZ Financial New Year’s Resolutions”

  1. BottomMiddleClass says:

    I agree with them all except for #9 “Move your banking online”.

    I don’t trust any company or government agency enough to give them an extra key to my account. For example, a water main was leaking heavily right in front of my house and the water company sent me a bill for $4,000 dollars one month. Back in the pre-smartphone days, a thief stole my phone and rang up $2,000 dollars in long distance fees. If either of these had “automatically” drafted from my account it would have setup a messy cascade of bounced checks and service fees. This is also the reason I refuse to pay with a debit card. Take my card or take my Cash but I’m not typing the Pin Code to withdraw money from the bank unless I’m at the bank.

    I’m the first to admit I’m overly paranoid, but writing a few checks every month and buying some stamps and envelopes is a small price to pay for knowing my entire life won’t be disrupted if the water company suddenly decides to backcharge me for $12,000. http://www.cbc.ca/news/canada/toronto/12-000-electricity-bill-shocks-ont-man-1.913244

    At the very least, keep your checking account and major savings account in seperate banks so a billing issue can’t wipe you out completely.

    Last but not least, when I’m writing checks I seem to have a LITTLE more bargaining power when the cable or phone company arbitrarily raises prices. I think I’ve “saved” enough to buy stamps and envelopes over the years by calling and threatening to cancel if they don’t honor their original price. It’s probably not as easy when they’ve already taken the higher price out of your checking account.

    I know I’m a dying breed and in a few more years apple will probably just deduct my iFee right out of my paycheck, but I’m holding on to my CHOICE to pay for as long as I possibly can.

    Whew what I rant… I’m definitely getting old. GET OFF MY LAWN!

    • You think they dont have FULL access to everything in your offline account?

      hahaha !

      • BottomMiddleClass says:

        I know the IRS has full access to my account. But I maintain the naive hope that Time Warner, Netflix, Facebook, Amazon, The Dollar Store and other companies can’t just take money out of my accounts unless I give them permission. And I will continue to give them permission one payment at a time for as long as I’m able.

        If we’re already at the point where any company can change their terms and extort the new monthly fee out of a customer without any recourse on the customer’s side, then things are only going to get worse. Much worse. And I guess I need to withdraw my money and bury it in the backyard and guard it with a damn shotgun. (Let’s see someone autodraft that!)

        Sorry Barry. Automatic credit card charges are acceptable. Automatic payments that you have to approve every month are fine, but do NOT give a company the ability to automatically draft an undetermined amount of money from you every month! They will eventually screw up or get hacked.

      • lucas says:

        I think you and BMC have a different “they” in mind. In my case, my cable company account and my bank account are not linked, so they (the cable company) have no way to auto-debit my checking account. You two also seem to have a different opinion of what “move all your banking online” means. Of course, they (the bank) has full access to your account info whether you are online or offline, but that is a different question from whether a non-bank entity has access to your bank account, whether online or off.

      • Anybody you can pay with a check or a credit card you can pay online.

    • whskyjack says:

      I control all of my payments from the bank. BOA has an automatic payment set up where I control how much and when. I just set a monthly payment and they send it automatically. If I owe more then I go in and change it. It is all my control. I do this with all my credit cards so the minimum is always covered. This way my chronic absent mindedness doesn’t cost me any late payments. I usually go in before the bill is due and edit the payment to the correct amount to pay off my charges.


    • Iamthe50percent says:

      I’m with you BottomMiddleClass. The only auto-pay I have is for the mortgage which is serviced by the same bank where my checking account is. I started that decades ago when I did a lot of business travel. I keep a hefty cushion in the checking account (damn savings account only pays 1% anyhow) so they no excuse to say I’ve defaulted on my payment. I charge most everything to the Visa card (my wife likes the points) and I pay it all off every month. It’s no big deal to write half a dozen checks every month. I track everything in the now defunct MsMoney and balance every statement. This takes a lot more time but I actually enjoy it. I guess I have the soul of an auditor. BR obviously has the soul of a poet. That’s what makes him so enjoyable to read.

      From your handle and “GET OFF MY LAWN”, I’d guess you and I are a lot alike demographically. Except I’m definitely Working Class not Middle Class. We do seem to be a dying breed, in more ways than one!

  2. rd says:

    One small exception for No. 10. The complexities of US tax law mean that a 401k that you participated in for at least 10 years and have separated from the company is available for penalty free withdrawals after age 55. This penalty-free ability is lost if the 401k is rolled over to an IRA. This could be important for people who are thinking of retiring before 59-1/2 or are forced to retire. 401ks and 403bs also seem to have more protections during bankrupcy and litigation than IRAs.

    It would be nice if Congress made the overall tax-deferred account system less complex and more uniform. I believe in pink dragons as well.