As 2013 draws closer, it's a good time to start thinking about your personal finance resolutions so you can look forward to a prosperous year. When it comes to New Year resolutions, financial goals regularly make it into the top 5.

However, as many of us do not sort out our basic finances, it is difficult to stick to our resolutions and many give up on their plans to save more or spend less after just a few weeks. So what should you do to prepare for 2013?

1. Edit your bank account

Start with the basics. Get on top of where your money goes and it will be easier to plan ahead. Four in 10 of us do not even keep track of our direct debits, so we could be paying for things we no longer need.

2. Make the most of low interest rates

2013 is set to see interest rates remain at their historical low so do not miss this opportunity. Switch borrowing to a lower rate and if you can afford to set up or increase your direct debit to clear more from your mortgage (provided you can do so without penalty). Even $50 a month adds up over the term.

3. Check your life cover and make a will

Many of us have no cover at all and more than half of us do not have a will. Find out more about the types of Life Insurance Plans available to you and learn how you can protect your loved ones.

4. Clean up your credit file

You can check your credit file for free once a year from Equifax Canada (equifax.ca or transunion.ca) or if you want to know your score, it will cost you around $24. Clear or close any accounts you no longer use. It will improve your credit rating and reduce the risk of fraud. But before you do, make sure you read my next week’s tip on how to spot identity theft. Add my email to your contacts to ensure you will receive my weekly tips in your inbox.

5. Consolidate your savings

If you have several accounts it is harder to keep track of your cash. Put your savings into one tax-free cash ISA and shop around for the best deal.

6. Ditch the high-cost debt

If you still have a credit card that charges interest, it is about time you switched to a zero-percent deal. Store cards charge the highest rates, so if you borrow on one of these consider cutting them up – or better still, stop borrowing on cards at all.

7. Go for cash back

If, however, you are one of ten who clears their credit card balance in full each month, make the most of cash back cards to earn money on everything you spend.

8. Review your pension(s)

Many of us do not even know where our pension is invested, let alone if it will provide us with a decent income in retirement. It’s time to track yours down and check if it’s on track.

9. Now you can start to set yourself some financial goals for 2013

Start thinking about what you want to achieve. To have no more credit card debts? To reduce the mortgage by $3,000? To start saving $50 a month? Be as specific as possible and put a date when goals should be accomplished.

10. Finally, devise a budget

Work out how you are going to achieve these goals. Remember they need to be realistic or – like a diet – you will give up if you starve yourself financially. Now you are ready to welcome 2013.

(Source: The Telegraph)