Let’s face the ecomonomy doesn’t seemed to be improving!!!! 401k’s lost value, home values fell, credit card debt skyrocketed, unemployment, salary and job cuts, etc. 2009 is the year to get your personal financial house back in order.

Listed below are actions my family have implemented over the past year:

Cutback or eliminate Credit Card Usage
Tuck the plastic away and pay cash. Yes, cash. It’s that paper and coin stuff in your wallet or purse. Become friends again with George, Abe and Andrew. If you aren’t a cash-carrying fan, use your bank debit card. You’ll be less likely to spend the extra $5-$50 if you know it’s coming directly out of your bank account.

Create a Budget
Strange as it may seems, many people don’t know where their money goes each month or live by a budget. I have an awesome electronic budget I can share with you. Start by documenting what you spend every day for a month. Track every penny from the electric bill to tipping the parking attendant. Once you know where you spend, you can start making adjustments. Be realistic and be ready to cut things - even if it’s for a month - to see if you really miss it.

Make a Commitment to Know and Improve Your Credit Score
If you don’t know what your credit score is, you need to. It’s like knowing your weight. If you don’t know what the number is and set a goal, how will you know when you get there? Find your credit score using sites such as MyFico which is free and provides you with a full credit report. Improving your credit score by paying bills on time and lowering debt will save you money in the long-run by being rewarded with lower interest rates. Tip: Mark your calendar to order a credit report every six months to track your progress.

Pay More Than the Minimum
If you are only making the minimum payment on accounts, not only are you paying more in interest but you aren’t taking the opportunity to improve your credit score. Try and pay an extra $10-$15 on credit cards and if you are extremely disciplined, try and pay an extra 5-10% on your mortgage payment (if not each month, every few months). Over time these extra few dollars can save you hundreds if not thousands in interest.

Create Debt Reduction/Elimination Payment Plan
1. List all of your non-mortgage debts in order of smallest balance to greatest with the minimum payment on each. I also list the interest rate on each. If you have two similar balances,  list the highest interest rate account first.

2. Determine how much you can pay towards your debts each month. Make the minimums on all of the accounts except for the first account (smallest balance) on the list. Put any and all extra money towards this account. Maybe it’s an extra $50 a month.

3. Once the first debt account is paid off, take the money (minimum payment + extra) being paid on account #1 and apply it to what you were paying on account #2.

4. Repeat until all accounts are paid off. It’s quite simple to do and will provide motivation and a great deal of satisfaction in addition to saving you money! More for you, less for the credit card company.

Create “Found Money” Situations
Maybe it’s a garage sale, selling clothes at consignment shops or Dynamicmom. Maybe it’s finding a job on the weekend or a freelance opportunity. Make 2009 the time to earn some extra income to apply to your debt plan.

Contribute the Maximum to Retirement Plans
The stock market is in the tank but we know it will come back so why not buy when stocks are on sale? Invest in yourself and put the maximum you can towards retirement. If your company has a 401(k) contribution match - take advantage of the free money. Don’t forget to contribute to your IRA too!

Start an Automatic Savings Plan
Even if it’s $25 a paycheck, put it aside in an ING (ING is great an offers a higher rate than banks. No overhead as it is online banking)savings account. Having it set aside for emergencies will provide a great deal of comfort.

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