Last month we promised to save more, spend less, and finally put together our estate plans. Now it's time to make sure you don't let yourself down. By Brett Graff

Ringing in the New Year — especially in a recessionary moment — is the time for us to make a financial fresh start. A recently released study by Dorothy.com and Harris Interactive reports that 58 percent of people with resolutions in 2010 are vowing to focus on money matters, while 17 percent will look for a new job.

 “The new year is typically the moment to set up your objectives,” says Odile Carru, a personal and professional coach in Miami, FL.  “And this year, money is the main concern.”

But there is one pesky reality getting in the way of our worthy resolutions, say experts. It’s that we’ll be so distracted by everyday demands that our financial improvement plans will get pushed aside, despite our promises. So this year, before crossing-your-heart and hoping not to die before you get around to writing your will, saving for your kids’ college or starting an emergency fund, you might first resolve to think of things in a new way. Because research shows that by tweaking the way you view tasks, you can make even the most mundane money moves more likely to accomplish.

“It ultimately comes down to what is motivating behavior,” says Sean McCrea, an assistant professor of psychology at University of Wyoming, who led a study that practically eliminated procrastination in a group of subjects by simply rephrasing the assignment they were asked to perform.

McCrea says we have to first commit ourselves to the objective, which is best done by focusing on the benefits rather than the yawn-inducing job ahead. For example, instead of vowing to save for retirement, you should instead decide to create Golden Years filled with fishing, health care and — given the dwindling Social Security funds — food and shelter.

“You’ll be more agreeable if you first think about why it’s desirable,” says McCrea.

But after you see the financial benefits so clearly that you’re craving them even more than the chocolate cake you passed over (losing weight still ranks as the No. 1 resolution,) you’ll have to overcome the next challenge. And that’s making sure that life’s daily distractions — the monthly bills, the job, the dog — don’t get in the way of your long term goals.

“Everyone has good intentions but where they fall down is implementing them,” said McCrea. “To succeed, you need to start by taking a single concrete action.”

Here, experts help slide some money resolutions away from the “someday” category and into “today.” Afterward, they’ll offer that first step for success in 2010.

Someday: Writing a will.

Today: Lifting a huge burden off of people who love you.

Step No. 1: Because a will merely dictates who will get your assets, start by merely considering who you’d want to have them. “People feel this is a contract with death and they think, ‘Gosh, this isn’t really something we want to think about,” says Paul Berman, an estate attorney in Kendall.  “But when people finally get around to it, there’s a sense of relief.” Afterward, it’s a matter only of getting those ideas on paper, says Berman.

Someday: Starting an emergency fund.

Today: Protecting your family and saving your home. 

Step No. 1: Sit down and take a good hard look at how much you spend each month on housing, car-payments, food, and anything else you couldn’t immediately cut out, advises Richard Feldman, a managing partner at Investor Solutions Inc. in Coconut Grove. That might be enough to get you to save – rather than spend – a year-end bonus. “Some people are clueless as to how much goes out the door and comes in,” says Feldman, who advises stockpiling three to six months worth of critical costs.

Someday: Updating your resume.

Today: Designing a marketing tool for your employment.

Step No. 1:  Begin by brainstorming, and jot down your most recent accomplishments, says Lori Deibel, owner of Be Resume Ready in Pompano Beach. “Ask yourself, ‘What did I do? How did I do it? And, what was the result,” she says.

Someday: Saving for retirement.

Today: Setting aside money during your peak earning years to maintain the same lifestyle later in life.

Step No. 1: Investigate whether your company has a retirement plan, says Brian Exelbert, a financial advisor at the Bermont-Carlin Group at Morgan Stanley Smith Barney LLC. If not, call your favorite financial institution – any bank or investment firm — and open an IRA or a Roth IRA. Already have one? Make a painless deposit of $10 or $20. “I recommend starting off slowly because you never want to take money out,” he says.

Someday: Saving for your children’s college fund.

Today: Ensure your kids have a choice of colleges.

Step No. 1: Look at what college will cost in 18 years, says Morgan Stanley Smith Barney’s Exelbert, who points The College Board figures forecasting four years at a public university will  cost $148,000. If you find that intimidating, move straight to selecting a plan. Two good choices, says Exelbert, are Florida’s prepaid tuition program, which lets you pay tomorrow’s tuition at today’s rate, and Section 529 savings plans, which let your money grow tax free if you use any profits to pay for higher education expenses. “Start doing something,” he says. “It’s better than nothing.”  

Source: Dorothy.com and Harris Interactive

Comments (0)

Subscribe to this comment's feed