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Are you nearing your personal fiscal cliff?

main.jpgIf you’re like me, you probably squirmed uncomfortably through this whole “fiscal cliff” nonsense. While the president and Congress have finally come up with a few compromises that get us away from the cliff (nothing like kicking the can down the road!), the long delay and use of “head-in-the-sand, if-we-ignore-it-maybe-it-will-go-away” tactics might have been an uncomfortable reminder that you’re tipping near the edge of your own fiscal cliff.

Now that it’s 2013, it’s a great time to get your financial house in order. Here are some tips to help you back away from the precipice:

Live within your means. Pay off your credit cards and get rid of them. If you can control your personal spending and are generally pretty good with your money—personal honesty is key here—keep one credit card that has great benefits (cash back rewards are great) and use it for EVERYTHING. But only if you pay off the balance each month. Instead of using your credit in the traditional way, use it like a checking account to rack up big and small purchases like gas and groceries that earn you free money. But again, only if you can pay the full amount each month and avoid interest payments.

Tax time cometh. Make sure you have all of your W2s (you’re supposed to receive them by the end of January). Are you paying interest on your student loans? Make sure you’ve received the statements from your lender and you’re writing that off. You’ve earned it and every dollar helps.

Chip away at your debt. Can you afford to pay $50 more a month toward your student loans, car payments, or mortgages? I bet you can. DO IT. You probably won’t miss it, and you’ll save a ton of interest in the long run.

Are you saving? You should be - even if it seems insignificant. Try $50 a month. Setting up automatic transfers from your checking to your savings accounts can help.  Having a rainy day reserve or an extra few dollars to put toward a necessary purchase in the future will be totally worth it.

Make your savings work for you. If you’re lucky enough to have several hundred (or, lucky you, thousand) dollars sitting in your savings, put a manageable chunk into a long-term savings account that gets you more than just 40 cents a year. Your bank (and several online banking companies) can give you options that start at just six months to a year. Your hard-earned savings will get you hundreds instead of a few pennies.

Need more advice? Check out Jared Rendell’s Financial Sanity for the Young Nonprofit Professional or Get-Out-of-Debt Resolutions for 2013 from U.S. News & World Report.

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