How to Set New Year’s Financial Resolutions You Can Keep
Each year we do the same thing...making the same resolutions...and every year it’s the same old thing. No matter how much you start with the best of intentions, you never manage to pull the proverbial rabbit out of the hat to fulfill your New Year’s Resolutions. Maybe you just don't know what kind of resolutions to set...or how to get started. Certainly as it pertains to your finances, especially in this economy, it is important to set the right resolutions to get your financial house in order! Even more so, it is important that you start now, so that you can meet specific deadlines that occur throughout the year. I've put together a plan for myself that I wanted to share for others in case you too are in need of keeping a resolution or two. You might find you can actually keep a New Year’s Financial Resolution this year.
Common sense tells you that your goals need to be specific with details and timelines to their fulfillment. For example, if you put on a few pounds in '08, you can't just buy a gym membership and say you want to get back in shape. You should instead set a weekly workout regime, sign up with a personal trainer, and decide to lose x pounds by x date...working out a set number of days each week.
As it pertains to your personal finances something more than a generic plan about your money and where is goes is an absolute necessity. You should set a simple, realistic budget that reflects what you have spent in previous months.
In this shaky financial market, credit is king! Maintaining good credit is an important foundation for achieving the rest of your financial goals. So start by finding out where you currently stand with a credit report from Get your credit report at www.annualcreditreport.com (completely free) or
www.myfico.com (charges a fee, but includes the same FICO scores that your mortgage lender will
use). Any other “free credit scores” are NOT true Fair, Isaac, & Co. (FICO) scores, which are the only
scores that matter. If your credit score is lower than 680 due to some outstanding debt, see if you can get those bills paid off as early in the year as possible. Pay the credit cards with the highest interest rate first and then move on to the ones that can be paid off in full so you can start with as clean a slate as possible. NEVER CLOSE AN ACCOUNT IF YOU CAN HELP IT! Keeping an account with no balance open will help with your credit history. About once ever 6 months, take the card out, charge something small on it, then pay it off in full when the bill comes.
Experts in “getting things done,” agree that it is best to list small, attainable goals rather than go for a lifestyle change overnight. By giving yourself simple tasks that you can even complete in five minutes, once a day, you will make headway over the course of a month. Each time you complete a task you should celebrate! Get up and do a little "end zone" dance or gig. Pat yourself on the back. Send an email to yourself congratulating your accomplishment. This will go far to helping you stay motivated to reach the next task.
Below are some questions to aid in getting you to hone in on what specific, measurable goals, within different aspects of your finances, you need to be working on. Feel free to call or email me for a free consultation to help you on the right path, or for direction to gain insights into your spending patterns and come up with answers to these questions. If you have ideas that have worked for you, feel free to share them in an email or comment as well as sharing links to appropriate articles or sites that have helped you.
What is the category of spending that concerns you the most?
How much did you average spending in this category last year?
What was the highest month within this category?
What was the lowest month?
What are your spending goals for this year compared to last year. In which categories and months can you lower your spending?
Who is going to hold you accountable? Email or call them now. (let it be me!)
What are you going to do with the amount you save within this category (make it automatic thru electronic debit) – save or give?
How much money did you have in emergency savings at the beginning of 2008?
How much money do you have in emergency savings now?
What is your goal for the end of January for your emergency savings account?
By the end of February?
By the end of the 2009?
Have you seen a recent credit report? If applicable, list the most annoying and/or severe derogatory item on the report (i.e. collection, judgment, late credit card, car that was reported late but was actually on time).
What is one action step that you can take TODAY towards resolving this (i.e. Make an initial phone call, draft a letter to the credit bureaus, calling me to review your credit with you)?
Do you currently own a home? If so, do you have someone managing your mortgage for you? (feel free to ask me about this) If you do not, now is the time to plan to buy. Ask me about helping you set up a plan.
Write down the next action step and the date that you are going to do this by. Write out a simple agreement with yourself such as, " I, Darren Orshoff, will immediately take 10% of every one of my paychecks and put it in a savings account not associated with my other accounts. Once the account reaches x dollars, I will transfer that money to my eTrade.com account and buy more of OEHY stock. I will reach x dollars by February 21st, 2009. I will continue to save 10% in the same manner after this date and from then on." Then sign and date it, and give a copy of it to someone you trust who can give you reminders. Do the same for them as well.
Put some focus on the real estate market. If you are not a homeowner, then ask yourself why not. Create a plan like the above to get there. Set up a time to meet with me to dicuss this. If you are a homeowner, make sure you have the right loan on your primary residence. This is SO important in this market when home prices have been in, and will likely continue to, decline.
If you have an adjustable loan that is going to adjust in the next two years and you have equity YOU MUST REFINANCE IN TO A FIXED RATE LOAN IMMEDIATELY!!! Do not delay - do not pass go -- do not collect $200 -- CALL ME NOW! If you do not have equity, then you should immediately consider doing a Loan Modification. Be careful of the advertisments you get in the mail. Loan Mod companies are popping up right and left. ONLY deal with one who is approved by the Department of Real Estate and has a money back guarantee! The attorney-based loan mods I am associated with have both of these! I can let you know if you qualify within 48 hours.
If you are looking to purchase a house you MUST get preapproved BEFORE you start looking for a home! Call or email me to find out why.
Call me today at (888) 823-2261 for your no obligation, free consultation.
Print out goals/resolutions and put it where you will see it every day. Read (aloud) the agreement with yourself daily. This will keep you focused on it and embed its success in your subconscious.
This should hopefully get you started, and help you to consider other areas of your finances (or other aspects of your life) that you want to transform in 2009. I look forward to hearing from you, about your resolutions and goals, what your plan of attack is, and how I can help you get there!
Here's to your success!