1. Create a new budget. A new year calls for a new budget. Rolling over an existing budget might be easy, but making changes now is easier than dealing with debt in the future. Have you moved, switched insurance, or added a new family member (child or pet) in the last year? Take into account what changed in 2011 and what you’d like to change in 2012. A pay increase or bonus might leave you feeling carefree, but using that as an excuse to splurge can quickly destroy your old budget. Update your budget (or if you don’t have one, start one) with help from these top five budget sites.

2. Ditch credit card dependency. If you’ve already got your budget under control, then putting the credit cards away shouldn’t be too hard. We don’t usually budget cash for impulse buys, so without cash in hand we often turn to the credit card quick fix for items we want but don’t need or can’t currently afford. The easiest way to eliminate this debt inviting thinking is by leaving your credit card at home. Removing the temptation is one way to break free from credit card dependency.

3. Improve your credit score. Don’t let your credit score surprise you. A bad score can keep you from getting the best interest rates, force you to pay deposits for utilities, or even cost you a job. Check your score, and if it’s below 750 make a commitment to improve your score in the New Year. Check out these tips for how to beef up your credit score.

4. Cut spending on [insert budget category here]. This year make a vow to lower your grocery bill, entertainment bill, or clothing bill. Using coupons (not just cutting them out) and comparison shopping can save a lot more money than you’d think. Search a number of different websites or newspapers for the best deals available instead of buying something the first time you see it. Pricegrabber.com even does the comparison shopping for you. Even small changes like attending the cheaper daytime matinee instead of the pricey Friday night movie can add up to big savings.

5. Grow your savings. Cutting spending is a good goal, but a better goal is to grow the money you’ve saved. For example, that $3.50 you saved saying no to the office Starbucks run once a week is good start, but why not take that $3.50 and turn it into nearly $1,000 after just five years. By investing those saved costs in a savings account you can actually profit from your good behavior. Check out how to build long term wealth with more easy tips.

The so-called “flash sale” discount sites are particularly enticing. A designer bag or new tech tablet is offered in limited quantities, and a timer runs nearby telling you how much time is left. Thinking to yourself, “I’ll never get a better deal,” you quickly make the purchase.

Sounds great, right? Not so fast: Spending more than you normally would, or spending on an item you don’t need (even if it’s on sale) is NOT saving—it’s overspending.

Here are a few tips about how to avoid the temptation to spend on the latest, greatest “flash” sale:

1. How Good is That Deal?

With a limited number of items and a limited time to buy, retailers are capitalizing on our impulse to buy now rather than later. But the deal you’re getting might not even be that great. As the New York Times reports, don’t be surprised if you find those same “exclusive” items on a different site, for less money and without the pressure.

2. Money For Nothing…

In an age of credit card information that’s automatically on file and “one-click” online purchases, sometimes it seems like you aren’t even spending real money. Reality check! The credit card bill is going to come every month, and it’s up to you to keep track of each purchase so you don’t blow your budget. Un-checking that “save my information” box at your favorite online retailer might be just the thing you need for a more frugal New Year.

3. Keeping up with the Joneses

Retailers on these “exclusive” discount sites have taken “Keeping up with the Joneses” to another level—not only can you purchase the new bag that your favorite celebrity is sporting, but you can also use social media to let your friends know about it. The best way to avoid going into debt is to stop keeping up with the Joneses – especially considering that the rich and famous don’t have much of financial track record to speak of.

It’s exciting news, but it remains to be seen if consumers kept up these good habits on Black Friday. US retail sales hit $11.4 billion to kick off the holiday shopping season, which is exciting for retailers—but not exciting if it means people are spending beyond their means.

A recent study by the Western Union Co. shows the number one consumer worry this holiday season is overspending. To prevent holiday-induced debt, create a budget before you hit the mall (or click your mouse) and stick to it. Going cold turkey on using credit cards for the holiday season is another smart move to avoid debt.

Can’t break the credit card habit? Counting on only making the minimum payment each month on a holiday credit card bill? Think again. Only paying the minimum will cost you more in the long run. For instance, if you rack up a $3,000 shopping bill on a credit card with an 18 percent interest rate, it will take 10 years to pay it off if you’re just making the minimum payment. That includes $1,700 in extra interest payments!

Instead of racking up debt this holiday season make a list- check it twice, budget wisely, and when you find that perfect present for Mom or Uncle Mike, be nice to your budget and resist the urge to splurge on “just one more” for yourself. Check out this BetterBudgeting.com article for 63 great gift ideas under $10!

The retail cost of menu items for a classic Thanksgiving dinner including turkey, stuffing, cranberries, pumpkin pie and all the basic trimmings increased about 13 percent this year…the average cost of this year’s feast for 10 is $49.20.

Don’t fret too much: While the price for Thanksgiving may have gone up this year, it is still a bargain at only $5.00 per person. Additionally, you can follow the tips below to avoid breaking the bank on this year’s turkey feast:

Beware the “Organic” Label

If you plan to buy organic this Thanksgiving, it is going to cost you dearly. We found a prepared dinner at Whole Foods with an organic turkey for $189.99—nearly 4x the non-organic price! If you want to eat local on top of that, it’s going to cost you even more. A 16lb local organic turkey from localharvest.org will run you around $180 for just the bird!

Take a Pass on Your Favorite Brand

Those name brands we all know and love can cost more than you would think at the checkout line. Save money by opting for the store brand version which typically costs 30 percent less. Turkey is turkey, after all. Your taste buds won’t know the difference, but your wallet will!

Stick With Tradition

Steer clear of less traditional options like a boneless rib roast or a pork roast. They might be tempting, but these options are usually much more expensive than a classic turkey.

No matter what you plan to do this Thanksgiving, remember to stick to your pre-planned budget. Those discounted items can be tempting, but consider if the item is something you actually need or just another impulse buy only to be remembered after it expires.

FirstJobs.org

If you’ve read a newspaper in the past 3 years, you may have been alarmed at reports of a volatile stock market, high unemployment, and retirement plans in jeopardy. Ever wonder if there’s anything you can do to protect yourself during troubling financial times? There is. And the more you can do to protect yourself from the economic factors outside your control, the better off you’ll be — not only now, but also when the Great Recession is officially behind us.

1. Finish your college degree. What do most people who have survived the recession financially intact have in common? A college degree. According to the Bureau of Labor Statistics, the unemployment rate for people without them (10.7%) is more than double that for those with a bachelor’s or better (4.4%). If you haven’t completed your undergraduate coursework, get it finished now to improve your employment prospects.
2. Cut your living expenses. The more you can do to reduce your monthly living expenses, the better. That might mean carpooling to save on commuter costs, trading in your vehicle for an older model to cut down on your car payments, or even moving to a cheaper apartment. Sounds painful, but once you make a few cuts on your monthly expenditures, the savings add up fast. Just be sure to put it into an emergency fund in an interest-bearing account.
3. Stay employed while job hunting. This one isn’t entirely under your control, but if you’ve contemplated quitting your job — don’t. More hiring managers are enacting “unemployed need not apply” policies. It’s not illegal, even if it doesn’t seem fair. Bottom line: Having a job while job hunting makes you seem more desirable in a competitive applicant pool, so don’t give up on yours, even if you can’t wait to leave.
4. Pay off debt ASAP. If you have any debt with unfixed interest rates — like student loans, credit cards, or a mortgage — refinance to secure the best terms you can. Then pay that debt down as quickly as you can. If interest rates rise, you’ll save a bundle in the long term and you’ll feel the freedom of being debt free.
5. Network when times are good. Having a group of people concerned about your wellbeing means you’ve got a list of people to call if you’re ever out of a job. To take one personal example: A friend of mine was laid off at the beginning of this year. She got home that night and starting calling people she knew in her industry — and one of those calls quickly led to a job offer. You never know until you ask.

The news can seem bleak, but the economy has weathered worse dips before. At the end of the day, economic indicators simply reveal trends by individual consumers. Make the right choices to protect yourself and your family and sooner or later, the economy will recover. It always has.

It’s Friday, so here’s a little financial humor to close out the week.

In this hilarious ad for Norwegian bank DnB NOR, a woman awakes in a five-star hotel room to discover that she has drunkenly married George Clooney, who adoringly shows her online photos of a vacation home he has picked out as a wedding gift to her.

The tagline? Translated from Norwegian, it reads: “Some people are lucky in life. For the rest of us, saving up can be smart.”

We’re just not sure anyone has ever been that lucky.

Sulekha.com

Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.

There are a million articles on how to save more money, but how many of them contain advice you can actually use? We distilled the best advice we’ve ever gotten into five simple and universal truths.

1. The best way to save money is not to spend it. Even if you’re getting something on sale or at a great price, you’re still spending money. So when shopping for anything — from groceries to a house — make sure you really need it before you pull the trigger.
2. Learn how to comparison shop. For airfare and hotels, check multiple airlines at once using aggregate data from sites like Kayak.com. Check what interest rates different banks are charging on mortgages and credit cards on Bankrate.com. And before filling up your tank, find the cheapest gas in your zip code on GasBuddy.com.
3. Knock out impulse purchases. If “I just want to treat myself” is in your vernacular, add up how much a $5 nail polish, $10 iTunes album download, or $4 magazine costs you on a monthly basis. That may be enough to make you speak a different language soon.
4. Know when to buy used. Certain things — like mattresses and medicine — should always be purchased new. (Just whispering the words “bed bugs” in New York will cause many people to run screaming from you.) But there are plenty of normally pricey items — from jewelry to musical instruments to home decor — that can save you a bundle on great-quality stuff when bought used. Know what they are and get friendly with Craigslist and Kijiji.
5. Ignore the Joneses. Keeping up appearances when you can’t afford to puts you on the fast track to debt and financial insolvency. That may mean limiting your contact with people who live a faster lifestyle than you do, but a friendship with a competitive undercurrent is not a friendship you will miss.

5MinutesForMom.com

Spinning off Tuesday’s post, the question remains: If you do manage to cut your spending on discretionary purchases, how much money does that help you save every year?

Bills.com has a nifty Ways to Save Money feature that shows you how much your savings can add up if you sock away the money in an interest-bearing account. For example, cutting $5 per week from your grocery bill every week adds up to a savings of $1,300 over five years, assuming a 1 percent rate of return. That’s a fairly simple change that you can make with dramatic long-term results.

One drawback: At the moment, low-risk savings vehicles (like savings accounts and certificates of deposit) are paying peanuts — a fraction of a penny on the dollar in most instances. And Bills.com’s calculator does not allow users to select anything under a 1 percent return, so it may be overestimating how much your savings will compound over time.

But we offer a solution. Punch your estimated savings and the actual rate of return you’re getting in your savings account into our Compound Interest Calculator to play around with more realistic outcomes.

Flickr.com

Being a personal-finance aficionado, I always click on those articles that promise to help cut the fat from your budget. Most recently, I was intrigued by the idea of RealSimple.com’s “24 Hours of Savings” article for finding ways to trim your spending throughout the day.

However, it’s disappointing that the bulk of the advice seems to be to cut back on lattes, deli sandwiches, sweets, booze, and takeout. All told, the amount of money the article says you can save by slashing those edible expenditures amounts to at least $26 per day.

My first reaction? “If you’re spending $26 a day on takeout, that’s $9,490 a year — no wonder you have money problems.”

It’s an unfortunate habit for personal-finance articles to contain unhelpful, overly general advice you have probably already thought of yourself. (For your amusement, here’s another example.) And much of the time, it amounts to little more than pound-foolishness.

So let’s put the question to you: What’s the most simpleminded advice you’ve ever seen in a personal-finance publication? And what kinds of tips do you find the most helpful?

USMint.gov

You’ve seen those commercials on TV that proclaim, “For just 50 cents per day, you can change someone’s life.” And while some of those charities are no doubt worthy, what if the life you could change were your own?

This is not a gimmick. To see how spare change can add up, I was just playing around with Econ4U’s Compound Interest Calculator to see what saving two quarters a day could earn you in the long run. If you sock away 50 cents every day, you’ll have $182.50 at the end of one year. Not bad in itself.

But what if you put that in a basic savings account paying 1 percent in interest?

Well, after five years of continuous saving, you’d have $930. And after a decade? You’re up to a whopping $1,908 — all for saving just 50 cents per day.

No matter how close to the brink you are, just about anyone can scrounge up two quarters by emptying your pockets, keeping an eye on the sidewalk, and checking change-return wells in vending machines. Hey, even the office couch may yield a return.

As they say, a penny saved is a penny earned — and with compound interest working for you, that makes nothing but sense.