One of the most popular resolutions to make every New Year is to budget one's money. Not surprisingly, it is also one of the first resolutions to fail.

Budgeting is a big task for those who have never done it or for those with an abhorrence of Microsoft Excel. And it is made worse by the fact that it brings up a painful truth: you simply don't have as much money as you thought you did. No one wants to be reminded on a monthly basis that expenses exceed income; we'd all rather be reminded of this fact several months down the road by a large burly man named "Knuckles." Delayed punishment is better than current (monthly) disappointment.

Budgeting is hard, too, because it is a beast to remember. If you go out to eat on a Friday night, that bill needs to go in the budget, not in your pants pocket, on a subsequent journey to the center of the washing machine (note to self: possible movie sequel starring Brendan Fraser). Budgeting is hard to get in the habit of doing, and it is made harder each and every time you forget.

Then, before you know it, you are right back where you started pre-resolution, spending money like a carefree young adult, throwing credit card debt to the wind. So rather than embark on a resolution that is doomed to fail from the beginning, why not break off one of these more manageable money goals this New Year and save yourself the inevitable failure. Or, at least, postpone the failure for longer than usual.

1. Save your change

If our culture is so enamored with money, then why are we so disinterested in the small stuff? Hatred of certain Presidents? Metallurgy boycott? For whatever reason, change seems to get tossed out of wallets, purses, and couch cushions with little to no regard for one's bank account.

Nevertheless, it remains actual money, and if you are wise enough to hoard it all year long, you can see a mildly appealing paycheck at the end of the year. Keep a jar beside your bed at home, and deposit all your loose change at the end of the day. Pennies, nickels, Sacajawea dollars - the jar can hold all shapes and sizes. There's no sense throwing away free money simply because it makes your wallet uncomfortable to sit on.

Aren't a big cash spender? Well your bank might just have a solution for that. Certain places offer you the option of rounding up your bill each time you pay with a card, and saving the left over change in your account for later. So if you grab a breadstick for $1.09 and pay with plastic, the bank will charge your card $2.00 and put the extra $0.91 into your savings account. Big whoop, right? Well by the end of the year, you'll have saved enough for an extra present, an extra night out, or an extra armload of breadsticks.

2. Understand your statement

Far too many people receive their monthly statement from the bank, credit card company, or investment firm, take one bewildered look at it, and throw it in a pile of papers to be filed away, never to be heard of again. Blame it on the intimidation factor of a spreadsheet of numbers and figures. Blame it on general malaise for money management. Whatever the reason, it pays to pay attention to those discarded docs. Discovering the language of a statement can prove to be a fantastic journey, like meeting the Indian in the bank account (note to self: possible Matthew Broderick star vehicle).

For this resolution, you will need one of two resources: A) the Internet, or B) a dictionary. Of course, the Internet is preferable because it is both vast and does contain Bejeweled2, which will come in handy when you desperately need a distraction. But a dictionary works fine, too. Basically you just need to look up the terms on your statement that you don't recognize. For instance, I looked up "revolving credit line" and found out that it is not, in fact, a carnival ride and does, in fact, mean that I will never be able to put anything greater than a set of tires on my credit card.

If a bank statement is too elementary for you, why not try tackling something a little denser, like a finance book? The more you learn about money, the better off you'll be when you're trying to save it, earn it, and make it grow.

3. Give yourself an allowance

This one should please consumers because you'll actually be giving yourself money. Who doesn't like that? OK, maybe the Amish.

Here's a fact: People spend more money than they should. And if you think back far enough, you'll realize that this was never really a problem when you were growing up as a kid. The reason why is because you didn't have much to spend. That is the idea behind this resolution. Make all of your money off-limits except for a weekly stipend of cash that you can spend on whatever you want. For the silver spooners, it might be $50.00 per week. For the frugal at heart, it might be $15.00. Basically, whatever amount of money you can arrive at that will not completely ruin your social and entertainment-driven life is a good number to settle on.

And then from there, go spend it. Saving money doesn't have to be like taking a vow of poverty. In fact, that is why so many savings resolutions fail. This way, you still get to spend on the things you love; you just can't spend that much. It's like high school all over again.

4. Bank online

Save a tree and save the hassle of ignoring statements and bills as they pile up at home. Of course, it probably isn't much of a hassle if you never really do anything about them. The real hassle is when you awake in a cold sweat, wracking your brain trying to remember if you mailed in the electricity bill. Oh well. Guess you'll find out in the morning when your coffee maker gets repo'd.

Online banking is a very achievable New Year's resolution because banks make it so simple nowadays. At US Bank, you can enroll in bill pay and never have to see that pesky power bill get soggy in your mailbox again. Bills can be delivered to your inbox and you can wire your payments at your convenience (provided it is convenient for you to be at a computer and have a fast Internet connection and not mind the small risk of identity theft).

Banking online will save you time in the long run, some banks offer an incentive to get you started, and your letter opener can finally, peacefully realize its place next to the staple remover in the junk drawer.

5. Start your taxes early

Ew, taxes. I am a little disappointed in myself that I even brought it up.

But that's the point I'm trying to make, in a roundabout way. No one likes to talk about taxes until it is almost too late, but if you get a head start on tax season you could find yourself saving money and sparing possible marital strife. Filing taxes is a stressful encounter, made more stressful by the pressure of getting them done. When placed under a time constraint, people tend to freak out, forget that they donated large sums of money to charity, and just mail the sucker in with a blank check, hoping that it all will go away.

That's no way for a responsible money manager to act, so consider being tax proactive this New Year instead. The IRS does not dictate any particular day when it is okay to start working on your tax return. They do not drop a giant protractor in Times Square; they don't send out an e-blast. You are on your own.

So why not use as much time as you can get to make sure that you're doing your return correctly? This resolution is as easy as can be. You'll be motivated to complete a New Year's resolution for at least the first couple weeks of the year, and by the time you hit the wall and wish you'd never committed to anything ever, your taxes could very well be done. It is the perfect resolution because it doesn't take the whole year to complete. It's like finding a loophole in time (note to self: possible sci-fi flick starring Vin Diesel). And the IRS never has to know.

Bonus item:

6. Budget.

Seriously. It's a good idea.

© 2009 Lending Club. All rights reserved.

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That’s precisely the question explored by Rob, in his article The Torn-Up Credit Card Application. Following the advice both from a credit card issuer and the FTC website to shred or tear up unwanted credit card applications, he documents an interesting experiment that he ran. He tore up an application he received into small pieces and then taped the whole thing back together to simulate the efforts of a potential thief. He then filled out the application, including a change of address and cell phone number for verification, before sending it in.

As much as I hoped that the company offering the Chase MasterCard would discard any applications showing obvious signs of tampering, the card was issued and mailed to the address provided. Rob used his parents’ address so that the card wouldn’t fall into the wrong hands. He then used his cell phone to activate the card. The net effect is that he proved that a card would be sent to a new address and could be verified with a new phone number, even when the application had clearly been tampered with.

The conclusion is that simply ripping up a credit card application (or similarly sensitive document) is not sufficient. Investing in a shredder is probably worthwhile to protect your credit record and personally identifying information. Even shredded documents could be recovered and used, but shredding makes the task much more difficult. To make things even harder for thieves, you can split shredder output across multiple weeks of trash pickup. That way, only a portion of the shreds necessary to reconstruct your documents would be available to a thief at any one time.

It’s disconcerting that tearing up sensitive documents isn’t sufficient to thwart potential identity thieves. Learning about the results of Rob’s experiment will probably make you think twice before discarding anything other than the smallest shreds of personal information.

Do you use a shredder for all of your sensitive waste?

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There are three major financial differences when you work through the first year of your planned retirement. First, your job (and not your nest egg) will cover your expenses. Second, you can make additional contributions to your portfolio. Third, your money will have to last one year less, assuming your lifespan is the same in either case.

Reviewing the assumptions from the previous post, consider a retirement portfolio worth $1,250,000, expenses of $50,000, 30% of the portfolio in equities, and a decline in portfolio value of 16.5%.

By working through the first year, $50,000 won’t need to be withdrawn from the portfolio for expenses. You would also be permitted to contribute an additional $20,500 to your portfolio, assuming that you were using a 401(K) and at least 50 years old. Even if you received no employer matching, your portfolio would be worth $1,064,250 at the end of the year. To get that number I reduced your starting portfolio (of $1,250,000) by 16.5% and added your $20,500 contribution. The actual number would be slightly different since contributions would be made throughout the year and may also be subject to market forces.

Plugging those numbers into the FIRECalc, we raised the success rate from 44.4% to 51.9%. Is working an extra year worth raising the probability of your money lasting through retirement by 7.5%? Also remember that this extra year worked was assumed to occur during an extraordinarily bad year for the stock market. Working one extra year during flat or positive gains of the market could have an even greater effect.

Would you consider working an extra year to significantly increase the likelihood of having enough money to last your entire retirement?

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