Building a Gameplan to Get Your Finances In Order

Feb. 1, 2009 – Jack Sirard contributing writer

There’s nothing like the start of a new year to get people thinking about their finances.

Whether you’re young or old, working or retired, starting out a new year with a financial plan of your own can really pay off in the long term.

It’s quite common for folks to make a lot of new year’s resolutions and at the top of nearly everyone’s list is saving more while spending less.

Unfortunately many of us fall short of that goal and many end up deeper in debt at the end of the year.

The best advice that I've seen on setting a realistic financial agenda for the new year is to put your goals in writing and keep that list where you'll see it, such as on your refrigerator or your computer’s desktop.

Over the years, I’ve talked to scores of financial experts looking for advice on how to get back on the road to prosperity:

Here’s their advice:

Keep tabs on your spending. Get out a tablet and write down every penny you spend for a month or more. That means not only noting how much you spend on your mortgage or rent, but also exactly how much you spend on coffee, bottled water every day. Financial experts agree that once you start doing this as a family, the extra cash begins to pile up quickly.

Work feverishly to pay off your debt. Start with your credit cards and develop a plan to pay down your balances to zero. Some experts advise paying off the credit card with the highest rate first, while others urge consumers to pay off the card with the smallest balance first in order to show immediate action. Either way, you want to clear the decks so you aren’t making interest payments. After you close out all but one or two essential cards, get a copy of your credit report to check for errors.



Give your portfolio a checkup. With all the turmoil in the stock market over the past year, you need to know exactly how your investment accounts stand. Now’s the time to get your asset allocation in line with your goals, time horizon and risk tolerance.

Fully fund your retirement savings programs. Take advantage of everything your employer offers, particularly in matching funds for 401(k) accounts. Take all the “free money” that your employer offers. In addition, fund your IRAs as early in the year as possible. Even if they can't contribute the maximum allowed, investors should put in as much as they can early on.

Save for your children’s or grandchildren’s education. It's easy to open a 529 college savings plan or even a bank account for your children and grandkids. Take advantage of long-term compounding by opening those accounts when the kids are young.

Check your insurance coverage. Are you paying too much on that aging car of yours? Check both your homeowner and auto policies to make sure you are getting fair value for your money. It may be time to raise your deductibles to save some money.

Update your financial plan. If you've had a financial plan created by a financial adviser, make an appointment with him or her to make sure it is up to date. If you've never gone through the planning process, now is a good time to consider it.

Jack Sirard is a retired national financial columnist and is a writer for Senior Softball News.