Time to Make Your Financial Resolutions
Time to Make Your Financial Resolutions

by Andrew Leckey

It is time once again to make your financial resolutions.

Don't wait for moves by others to clarify your financial future. No matter what happens, your do-it-yourself moves and convictions should take priority. Here are some financial resolutions for the upocming year

Pay off as much credit card debt as possible

Debt is what got individuals, companies and countries into this mess. It makes sense to carry only one card with you when shopping, pay off your bills each month and work down your outstanding balances. The costs alone should give you pause: The average credit card rate is 16.77 percent; the average credit card late fee is $19.51; and the average over-the-limit fee is $9.33, according to IndexCreditCards.com.

Have an investment strategy

The average six-month certificate of deposit and bank money-market account are each yielding less than 1 percent. Low rates on savings and bonds mean it may be time to begin carefully investing in stocks again, especially if you pulled out all your money during the debacle. In the long run, stock mutual funds, exchange traded funds or a portfolio of individual stocks provide growth for a personal portfolio. But investors typically get in and out of the market at the wrong times.

Analyze all finances and put aside a rainy day account

Total bankruptcy filings by consumers in the first nine months of 2010 were up 12 percent over the year-earlier period, according to the American Bankruptcy Institute. Know exactly where you stand with your money in the New Year by going over bank accounts, investment accounts, mortgages, credit-card debt and education accounts. Figure out how much you have and how much you actually own. Put together a workable budget and set aside three to six months of gross salary in a liquid account for emergencies. Do not touch it.

Have a viable financial strategy for home or rental

This housing market requires rational planning. There were more than 930,000 mortgage foreclosures in the third quarter, according to RealtyTrac.com. Meanwhile, the average 30-year fixed-rate mortgage is around 4.5 percent, according to Bankrate.com. Decide whether you can afford to own at this time. Work with lenders if you encounter problems. If buying, analyze all costs and your ability to pay in advance. Rates are low but you must qualify. If you have significant home equity loans, pay them off as soon as possible.

Maximize all benefits at work

Too many employees forget about benefits once they fill out their initial forms at hiring. Be aware of healthcare and investment opportunities because they can make a difference for your family. Continue to fund your 401(k) to the limit, especially if there is company matching. Just don't put everything in your company's stock -- diversification in all investments is crucial these volatile days.

Keep a wary eye on potential crooks seeking to gain from hard times

Social media has meant increased information but has also been a boon to disreputable individuals trying to bilk you out of your money. Spotting questionable deals and researching all opportunities is more important than ever. Getting a bogus marriage proposal or offer of $1 billion from a long-lost relative is laughable, but disreputable financial schemes that look good take money from innocent people.

Include family members in planning for the financial future

Many family members were taken by surprise in the economic downturn because they believed that everything was fine. Consider the past two years a reality check. Lack of communication between spouses about money issues became obvious. Too often, children couldn't understand why they suddenly couldn't get what they wanted. Every family member should have a general understanding of how much things cost and clear family spending priorities.

Article: © Tribune Media Services

Personal Finance: "Time to Make Your Financial Resolutions"