Financial tips for the New Year

January 2, 2008 3:40:43 PM PST
With the New Year, why not begin a new financial regimen?

Get started on the right financial foot with help from our favorite experts, who suggested ways to get out of debt and build wealth in 2008.

Tip #1
Set up an automatic system so you're paying yourself first with every paycheck, depositing money into either a savings or retirement account.

"Do it in a forced manner. You're really going to be surprised by how quickly you build up wealth," said Chuck Minnich of Foundation Capital Management.

Tip #2
Maximize benefits available to you through the government and your employer. Many employers match retirement plan contributions.

"You're able to put away over $15,000 in retirement plans at work. 401-Ks, 403-Bs and things of that nature are completely tax-deductible," said Minnich.

Tip #3
Don't sink further into debt if you can't afford to pay in cash, you probably can't afford it.

"The problem is people are charging things and running up debt that they can't afford. Then they find out the rates are so high that the majority of what you're paying back is interest," said Louis Polaneczky, a certified public accountant.

Tip #4
If you are in credit card debt, make paying it off a priority and eliminate debt on your highest-interest cards first.

Also, call your creditors to see if they'll lower the interest rate.

Tip #5
Get a copy of your credit report. Once you have your report, dispute any inaccuracies and improve your credit score.

To get your copy, visit Tip #6
Pay your bills on time. Your payment behavior makes up 35-percent of your score. Also, reduce outstanding debt. That's 30-percent of your score - It's better to spread the debt you have on a number of cards than keep it all on one card. Develop a long history with your creditors.. The length of time you've had a credit relationship is 15-percent of your score.