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5 money mistakes to avoid in the new year


New Year's resolutions can take a lot of effort to put into action.


We've got a much easier approach.


Just stop doing these five financial things and you'll have more savings, smarter spending habits and a secure identity in the next year.


1. Stop saving your leftovers

Saving shouldn't be an afterthought. Instead, adopt a "pay yourself first" model, which is a battle tested way to increase your savings.


Rather than waiting to see what's left at the end of the month (which tends to be, at best, paltry and arbitrary and, at worst, a guilty gut-punch of nothing) and putting that toward savings, set up an automatic transfer that will move the same amount of money out of your checking account to your savings account as soon as it lands each pay period.


How much should you set aside? ICYMI: you should be saving 10% to 20% of your take-home pay a year. But your first task is to get $1,000 into that savings account for your emergency fund.


Action plan: Decide on an amount you want to set aside each pay period. Go to your bank's website to set up an automatic transfer to happen on pay day.


2. Stop using painless payments

Every day retailers and payment systems are streamlining processes so you can pay faster and easier.


But the farther away you get from the act of paying (which is painful) the more money you're likely to spend, says Dan Ariely, a behavioral economist and co-author of "Dollars and Sense."


"If it is an automatic deduction you don't experience the annoyance in the same way and you're less aware of the costs," Ariely said.


Forcing yourself to pay in cash, or at least forcing yourself to re-enter your credit card number each time you purchase something online, keeps you in touch with the pain of paying and helps you remember that buying something now means not saving for later.


Action plan: Pay by cash or check, when possible. Do not save your credit card number on your computer, retailer's websites or virtual wallets. Avoid one-click payment systems.


3. Stop being silent about money

Research shows that not only are we bad at dealing with money, we're also bad at talking about money.


But, the good news: research also shows that the more we talk about it, the more confident we are and the more information we have to make better money decisions.


Also: young people are better at sharing and comparing their financial wins and fails than other groups.


Talking with people about money makes us more aware of the invisible saving that people are doing in comparison to their more visible spending. It also helps us make more informed and less stressful financial decisions, when we take time to ask friends about their money strategies.


Action plan: Discuss your retirement savings with your inner circle. Next, ask your besties about their salary. Maybe also share and compare using apps that mask your personal details.


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Read the rest of this article over at CNN Money and remember to visit CreditConfident.com for a FREE credit review.


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