Make Your Financial Resolutions
Andrew Leckey

It's time once again to make New Year's financial resolutions.

The good news of the past year was that the global economic system did not crumble altogether and a hundred new Bernie Madoffs did not suddenly surface.

Stocks finally give investors something to grin about as the average U.S. diversified stock fund rose more than 25 percent.

The bad news was high unemployment, an uncertain economy, home foreclosures and a citizenry apprehensive about all things financial. Those negatives will linger into 2010, making it a year to tread lightly but carry a big emergency account.

Market volatility is certain to continue. The most significant potential boost to stocks could come from an improved jobs picture that makes all investors breathe a sigh of relief.

Many economists expect to see a slow economy, with interest rates rising only if employment figures improve. Even then, the rate hike would likely to be no more than a half-percent. Nobody is swinging for the fences in 2010, least of all the Federal Reserve.

Here are New Year's financial resolutions for 2009:

--I will erase as much of my credit card debt as possible.

The average credit-card rate, unlike other declining rates, has risen to 15.94 percent, or more than a full percentage point higher than a year ago, according to IndexCreditCards.com. The economy has caused rising defaults among current card holders. Card issuers also raised rates before new federal rules making it more difficult to raise rates kick in next February. The average late fee is $34.35 and the average over-limit fee is $36.75. Carry only one card with you when you shop, pay off your bill each month and work down outstanding balances.

--I will assess my family's financial situation from top to bottom.

Bankruptcy filings through the third quarter of 1.4 million were 400,000 higher than a year ago. Know exactly where you stand moneywise in the New Year. Go over all your financials, such as bank accounts, investment accounts, mortgages, credit-card debt and education accounts. Figure how much you have and how much you own. Then put together a workable budget that you evaluate each week. Also invest to the full extent of your company 401(k) account and have an emergency account equal to six months of salary.

--I will beware of crooks trying to capitalize on hard times.

There are social networking scams in which someone becomes your online pal and, after getting closer to you, asks for financial assistance. Usually the story is that your new buddy will lose his car or home unless he gets some quick cash. He is your friend, right?

Hard times mean that everyone can become a target of a variety of fraudulent e-mails, letters, postcards and personal contacts trying to elicit money or obtain personal financial information so your accounts can be pillaged.

--Realizing the potential of the stock market, I will assemble a sensible portfolio for growth.

Average money-market account rates are down to 0.28 percent, less than half what they were a year ago, according to BankRate.com. That low-rate environment is likely to continue, while the Standard & Poor's 500 and NASDAQ Stock Market have been rebounding. Take a look at what equity investments you currently own, then start to research some stocks or stock funds. Don't go overboard, but also don't cling to the fear that a massive downturn is imminent. A portion of your personal portfolio in stocks for growth makes sense as the economy rebounds.

--I will have a home financial strategy.

The average 30-year fixed-rate mortgage of 5 percent is nearly a full percentage point lower than the average a year ago, making this a good time to buy if you qualify for a mortgage. Meanwhile, the delinquency rate for residential mortgage rates rose to a record 9.64 percent of all loans outstanding in the third quarter, up more than 2 percent from a year ago. Whatever your situation, be home-savvy. If buying, plot out costs in advance. If you own a home, look over every aspect of it to see exactly where you stand financially. And if you've got considerable home equity debt, start paying it off now.

--I will formulate a long-term vehicle financial strategy.

The average price of $78 per barrel of crude oil is more than $30 higher than a year ago. Whether or not you took part in "Cash for Clunkers," a car is a major expense. Think about what you're paying, the value of your vehicles, how much you owe on them, the cost of upkeep and the longer-term outlook. You should know your likely car costs so you won't be surprised during the year.

--I will involve the entire family in our financial planning.

Use this economy as a learning experience to help everyone to understand the realities of economic decisions. Often there is little communication between spouses about money issues and virtually none with children except to say "yes" or "no" to purchases. One family took a vote in deciding to reduce its monthly cable television package so it could take a better vacation. All family members should know how much things cost and the priorities for spending.

Timeless Investment Principles More Valuable Than Stock Picks
Humberto Cruz

Rather than waste your time with useless lists, I'll emphasize timeless investment principles for 2010 and beyond. But I can hear you now. You also want specifics, not just concepts. I'll give you specifics, too.