If you have let your finances fall into disarray and have been putting off the task of cleaning them up, then there is no better time than January to begin getting your financial house in order. Here are five things that you can do this coming year to get back on track financially and make the most of your money. (For more, read Starting Early With Financial Planning.)

TUTORIAL: Retirement Planning

Make a Budget
There are many programs and resources that can help you do this effectively, such as www.mint.com, Quicken and Microsoft Money. Websites and computer programs can usually provide more realistic and effective budgets than written ones due to being better able to factor in non-periodic payments and one-time expenses, while also providing reminders for upcoming expenses and warnings if you are exceeding your budget. Many of these programs also allow you to link all of your other accounts, such as retirement and banking, to this program, so that they can provide a continual moving snapshot of your entire financial picture on a daily basis.

Adjust Your Tax Withholding
If you received an income tax refund of more than $1,000 last year and your income and expenses are likely to be materially the same this year, then it's probably time to fill out a new W-4 form with a higher number of allowances than you listed before. If your refund was for several thousand dollars, then you should probably increase this number by at least two or three for both federal and state withholding. It does not make sense to loan hundreds or thousands of dollars each month to the tax collectors at 0% interest. (For related reading, see Filing Your First Tax Return.)

Dump Your Losers
This may be the time to finally get rid of the stock that you bought five years ago at 45 cents a share that is now trading for a penny a share. None of the company's new products have caused the stock to rise to $10 a share like they promised it would, so you might as well cut your losses and liquidate this holding. Then you can declare a capital loss on the sale and either net it against any taxable investment gains or else deduct $3,000 worth of your loss each year until it is fully written off.

Refinance Your Home
Interest rates are at historic lows. If you haven't gotten around to refinancing your house and plan to continue living in it for a while longer, then this is the time to have your house appraised and get your paperwork together. Although refinancing can be a bureaucratic hassle in some respects, it can save you a bundle over time and allow you to contribute the difference to your retirement savings, or pay down other debt.

Protect Yourself
Lastly, you should create an emergency savings fund and get your estate plan in order, if you haven't done so already, to ensure that you and your family are always protected.

The Bottom Line
Whether you're looking to save a little more for retirement or just trying to get back on track, consider these options to improve your financial well-being in the New Year. (To learn more, see Financial Planning: It's About More Than Money.)

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