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Financial resolutions for the New Year

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November 24th, 2009

As you consider your New Year s resolutions, don t forget about your finances. Regardless of the number of zeroes at the end of your checking account balance, we can all use some guidance and inspiration when it comes to setting and achieving financial goals. '

Get organized

North Carolina-based financial planner Dennis Stearns says the New Year is the perfect time to evaluate your long-term planning, including a reassessment of investment risk tolerance and a review of how long savings will last at current spending rates. If you re not going to work with a planner, at least go to a site like www.mint.com or www.quicken.com and create some type of long-term strategic plan coupled with short-term budgeting, Stearns says. If you make no other financial resolution this year, Arizona financial planner Debbie Montgomery Placet urges retirees to review living trusts or create one if you haven t already. Living trusts are the foundation for an estate, Placet says. Without one, everything you have done or saved your whole life can be ruined. Once you have a good living trust in place, Placet reminds people to make sure you title new assets in the trust s name each year.

Check your emotions

Of all the areas in life where emotions should serve as a guide, money management is not one of them. Emotion is probably the most dangerous thing to an investment portfolio, says California investment advisor Ray Harrison. Don t let the allure of a hot stock or headlines about the financial crisis sway your investment decisions too much. Instead, Harrison says to use process, procedure, and discipline to reduce anxiety about your finances. ' Financial educator and executive coach Syble Solomon says deeply-rooted emotions about money can derail the best laid financial plans. Are you overly generous with family in a subconscious attempt to control them? Or do you spend beyond your means to maintain status in your social circle? If people don t think about what it is that causes them to leak money or use it the way they do, they wind up having great plans, and then they sabotage them, Solomon says.

Set specific goals

The best way to meet financial goals is to create a plan that includes specific, realistic, and measurable steps, Solomon says. For example, if you make a New Year s resolution to take a trip to Europe in 2010, chances are slim that you ll fulfill your dream. But, if you set a goal to book a two-week summer vacation to France and Italy by April 10, you ll be much more likely to make it happen. ' Next, Solomon says, draft a realistic plan. A lavish, month-long tour of Europe would be wonderful, but it could also cost $15,000 you don t have. Dream about what you want and then look at what is realistic for you, Solomon says. Instead, save up for a $5,000 trip by trimming $150 from your weekly expenditures. Can you cut out lunch with the girls a few times a week or put your golf club membership on hold? In the end, you ll have reached your goal without breaking the bank. ' Here s to a Happyand Prosperous New Year!

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