New year calls for a new plan
For starters, try reasonable resolutions
Cox News Service
January 1, 2006
Welcome to the last passage of the season — Jan. 1, the day when we look to the future and promise to be better this year.
We're talking about New Year's resolutions, a topic which will occur to just about all Americans sometime during the day.
Some will make a resolution or two, and most of those promises will evaporate.
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More advice: How to assess your financial affairs Recent Hank columns: |
New Year's resolutions typically deal with tobacco, fat cells, alcohol, family values or the family's money.
If you're thinking about improving your finances, check out the story below for some ideas. If you are wondering how you'll ever make yourself actually do these things, here are some things to think about:
• Know thyself. "I would suggest starting with a little self-examination," said Mark DiGiovanni, a certified financial planner in Snellville.
"Basically, you ask yourself, 'What is it about my current situation, financial and life in general, that I want to change?' "
The next step is identifying what you will have to do to make the change. The last question in DiGiovanni's litany is, "Am I willing to do what is necessary?"
That brings up the question of motivation. "Greed doesn't work," the planner continued. "People get burned by greed. Fear is a good motivator, but only short-term.
"The long-term motivator is love. If money problems are hurting your family life, for example, you use the love of family to keep you going."
• Put it in writing. This forces you think carefully about what you're promising. It will make your goal more palpable and perhaps more realistic.
It should also help you make your plans quite specific. If you decide you want to save more money, for example, you should make a realistic estimate of how much you're going to stash away each payday.
• Don't con yourself. If you've decided to save money, for example, you should build a system that keeps it saved.
"You can start a regular savings program through a credit union, if you have one, or set it up with your bank as an automatic withdrawal from your checking account," said Michael Smith, a certified financial planner in Sandy Springs. "The point is that your system makes you do it, and it takes the money before you ever touch it."
• Take baby steps. "If your goal is to get out of $50,000 in debt, make it your goal to reduce debt by 10 or 20 percent in 2006," suggested DiGiovanni. "Don't promise to do it all in one year, because that's too overwhelming."
It's also a good idea to slice up each task into manageable pieces.
Let's say you're thinking about saving for retirement. Your first step might be checking out all the possibilities, like 401(k)s, pensions and individual retirement accounts. To break that up even further, research one possibility at a time.
A related point: Keep your list short. Trying to fix everything at once is a sure recipe for frustration, followed by failure.
• Don't try to go it alone. You may want to consider hiring a professional to help lay out plans. If not, you can certainly use the public library and the Internet to find how-to advice.
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