VOICES FROM THE INDUSTRY: Making the right money resolutions for a better 2007

To redefine the way you shop: If you’re an impulse shopper, break the habit. As a suggestion, get a legal pad and make that your centralized shopping list-sepa-
A recent survey by the American Psychological Association reported that 61 percent of Americans consider money issues their No. 1 cause of holiday stress.

Want to get a head start on a better holiday season in 2007? Start with some of these important reso
lutions to improve your financial life. You can have it all without a lot of sacrifice, but remember a little self-awareness does go along way.


To track your spending: If you haven’t purchased financial accounting software or set up a reliable accounting method of your own, this is the year to do it. Expense tracking is the first critical step to getting personal finances in order.

To write down your goals: Have you ever written down the big things you want in life? Granted, all great dreams don’t cost money, but many do. Money buys freedom-to travel, to retire early, to start a business, to change careers. Putting goals in writing gives them a formality and a starting point for the planning you must do.

To consider advice on taxes and planning: Maybe you’ve always winged it with your taxes and considered your company 401(k) the ticket to your financial future. Chances are your planning is inadequate. Start getting references on good tax professionals and consider sitting down with a financial planning professional to discuss your current retirement savings picture and what you can do to improve it. Make sure they have a fiduciary obligation. Do not go to a salesperson who tries to act like a planner.

To cut your credit card debt: If you can’t ever seem to get yourself completely out of credit card debt, make this the year to do it. Take inventory of your balances, figure out if you can consolidate them under your lowest-rate card, and resolve to pay off an amount that exceeds the minimum-on time, every month. Oh, and pay cash from now on.

To save: If you haven’t signed up for your employer’s 401(k) plan or begun a savings plan tailored for the selfemployed, this is the year. And resolve to save at least 5 percent to 10 percent of your take-home pay and place the maximum in whatever retirement savings plans you qualify for.

Consider prepaying your mortgage: This advice isn’t for everybody, but if you’ve paid off your credit cards by paying more than the minimum, apply the same principle to your mortgage payment. Every dollar you prepay will potentially save thousands in interest over the life of the loan if you plan to stay in your home long-term. In fact, if you make one extra payment a year, either at once or in equal monthly shares over the course of a year, you can cut a 30-year loan down to 21 years. Just don’t short your investment plans to do it.

To refinance: Interest rates are still at near-historic lows, and now may be a
rate it for groceries, stock-up goods (it’s wise to start buying essentials in bulk), essential clothing or big expenditures you’ll need to make at specific times. Taking that pad with you wherever you spend money is a good way to keep a grip on your wallet.

To cook more: Even if you can’t boil water, eating out is one of the biggest drains on the American household budget. The National Restaurant Association has reported the average household spends $2,276 in restaurants annually, equal to $910 per person. Start small-resolve to
cook at least one or two meals a week you like that will be cheaper at home.

To attack that miscellaneous column: Do you really need deluxe cable? How much are you paying for your Internet service? Can you wear a sweater around the house and lower the thermostat? In every budget, there are items that can be cut. Take a hard look at your “essentials” to see how essential they really are.

Coan is managing partner with Wealth Planning & Management LLC, a fee-only registered investment advisor, and author of “Asset Protection and Wealth Preservation.” Views expressed here are the writer’s.

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