100 Tips for 2011
Greg McBride
10 sweet saving tips for 2011

Tip 4Track your monthly spending 

People hate to use the "B" word -- budgeting. Call it what you want, but you do need to get a handle on your spending. Doing so does two things. It helps you determine where you can cut back and helps maximize your savings efforts.

Begin by tracking your spending for a two-month period. Then take this information and build a realistic monthly budget (or "spending plan," if you prefer). Finally, track all of your monthly expenses, everything from the $1 tip to the grocery store bag boy to the monthly mortgage payment. At the month's end, tally up your spending against the plan and see where you did well and where you didn't. If you spent less than planned, move the excess into your high-yield savings account or use it to pay down debt.

Tip 5Pay down high-interest credit card debt 

For many households, the best return on your money is to pay down credit card debt. Whether carrying balances at 12 percent or 22 percent, credit card debt is typically the costliest debt households have. Plowing excess cash into repayment of credit card debt is a double-digit, risk-free return because it reduces the outstanding balance and the resulting interest charges. This is a sound move now as credit card rates are likely to move in one direction -- higher -- over the next few years.

When prioritizing your debt repayment, start with the highest-rate credit card first and focus on paying off the balances in descending order. Use Bankrate.com's debt pay-down calculator to develop a custom, month-by-month plan on repaying your debt.

Tip 6Begin or boost contributions for retirement 

The burden of supporting ourselves in retirement is increasingly on our shoulders. The first introduction to retirement savings often comes through a workplace retirement plan such as a 401(k). Contributions not only reduce your taxable income now, but your investment goes to work immediately and grows without the drag from taxes until you begin withdrawals in retirement. The regular contributions made with each paycheck represent the best example of dollar-cost averaging, buying fewer shares when values are high but more shares when prices fall. Any employer contribution, even at a reduced rate, still represents free money, so be sure to contribute at least enough to maximize any employer contribution.

If your employer offers a Roth 401(k), your contributions are made with after-tax dollars but withdrawals in retirement will not be dinged by taxes at all, allowing you to keep your entire nest egg.

Tip 7Make an IRA contribution 

If you or your spouse has earned income, then you are eligible to contribute to an Individual Retirement Account. Those under age 50 can contribute a maximum of $5,000 and those 50 and older can contribute up to $6,000, thanks to permissible catch-up contributions.




You can open an IRA with a bank, credit union, brokerage firm or mutual fund company, and invest the contributions how you choose. An IRA can be a great way to supplement the asset allocation of your workplace retirement plan where you're limited to an available menu of investments.

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