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It's a new year, and people are taking stock of the changes they want to make in their lives, especially when it comes to money. But simple financial resolutions may be the best to make.
So, what did you resolve this year?
One woman told me, "Just the same old, same old; eat right, get more active and stop procrastinating." Another said, "I'm not going to be late anymore, and I'm going to lose weight." One man said he was going to spend more time with the family.
But have they resolved to be better with their money? One woman laughed and said, "I have to have some first." Someone else said, "[I'm] trying to do some things a little bit differently with money, but not anything specific."
If you're looking for some financial resolution ideas, here are some suggestions.
1. Resolve to participate in your company's 401(k). Raymond James Financial Advisor David Petersen says a lot of people just aren't doing it.
"A lot of people, at least, are not aware that's available or even doing that. It's usually free money their company is giving them in matching it. So, that's probably one of the biggest things," he said.
2. It sounds simple, but actually look at how much you're spending every month. Petersen says many people think they already do that, but they really don't.
"They know where it's going, but a lot of times they have no idea, [saying], ‘You know what? I can't believe I spent that much," Petersen said.
3. After you've added up your monthly bills, resolve to cut unnecessary expenses, even if those cuts are painful. For instance, eat out less, buy fewer minutes on your cell phone plan, or get a cable or satellite package with fewer channels.
"You may think this cuts back on your lifestyle, but if you look and review how much you're using these items, maybe you can cut back," he said.
4. Cut the cord. This goes especially for people close to retirement. Petersen says too many of his clients feel an obligation to regularly give their adult children money. If you can't cut the cord, try to lessen how much you give.
Petersen said, "You want to help them get started, especially in today's economy, as best you can, but if it's going to hurt you ultimately… are they going to be able to help you when the money runs out."
5. The last resolution is to slow down on big purchases and study them more carefully. He says people tend to check if they can afford a major purchase at the moment, but they don't look for possible ripple effects into what a big purchase can do to their retirement plan.
E-mail: pnelson@ksl.com
