Four smart financial moves to make in 2012

Financial resolutions are pretty standard in today’s economic climate and strengthening your financial position is a lifelong goal that that never goes out of style. Becoming financially fit takes times, energy and resilience. But if you visualize your goals each time you make a financial decision – and ask yourself whether this transaction will help or hinder your goals – you can get a lot done as the year progresses.

So as 2012 rolls around, examine four core financial areas that are crucial to your well-being.

1. Savings

The amount you have saved in the bank will impact everything from your ability to purchase a home to affording that fabulous vacation you’ve been dreaming about. Start with two funds: emergency savings and regular savings. Starting an emergency fund can lower your risk of being forced to turn to credit cards or drain your regular savings account if times get tough. When it comes to your regular savings, make it a habit to automatically transfer a percentage of each paycheck to your savings account each pay period to avoid the temptation to spend it.

2. Pay down debt

Credit card debt is like carrying around dead weight. It wears you out and serves no benefit whatsoever. Set aside a percentage of your paycheck solely for your credit card payments. And work on cutting unnecessary expenses while simultaneously bringing in more income until your balance is paid. Even small changes, like working overtime and cutting out $5 cups of coffee each morning will help you chip away at your balance more quickly.

3. Save for retirement

Once you hit 67, what you have in the bank is what you have to live on, plus Social Security. So it’s crucial to start preparing for your future now by taking the reins on your retirement. If your employer offers a retirement plan, contribute the maximum if you can. You can also open an individual retirement account (IRA) with most financial institutions.

4. Learn to invest

Most retirees will attest that investing in a variety of vehicles has helped them grow their wealth and meet their retirement needs. Investing can be frightening if you are new to the world of stocks and mutual funds, but there is a wealth of free educational material out there designed to teach you how to manage your money. So take a class, use online stock simulations, read up on different investment types and familiarize yourself with the market.