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Fit finances New year is prime time to set goals

Are you hiding from creditors? Clipping coupons at the end of every month? Consider making a financial New Year's resolution

Date published: 1/1/2006

By KELLY HANNON

ICKING DEBT in the new year could be just as hard as stubbing out the final cigarette.

But cleaning up your financial life in 2006 might help you keep other resolutions, especially ones linked to physical well-being.

"People that really concentrate on their financial health usually take a little bit of stress out of their lives, as well," said David Tronson, a certified financial planner and owner of Fredericksburg Financial LLC.

So if vowing to the hit the gym every day is unrealistic, consider making a vow to pay down debt, invest or create a savings account.

A good place to start, regardless of your resolution, is with a simple snapshot of where you stand, several Fredericksburg-area financial planners advised. How much do you owe, and to whom? What are your financial goals? What are your daily, monthly, weekly expenses?

Without a plan, "It's kind of hard to know where you're going," said Dave Ross, investment adviser for Edward Jones in Fredericksburg's Central Park.

On this one, it's back to the basics. During January, keep track of everything you spend. Carry a small notebook with you. Write down every stick of gum, cup of coffee and tank of gas you buy.

Then, at the end of the month, consider whether your daily $4 coffee is worth it.

It's probably not, Ross said. That $50 to $100 a month in coffee, or whatever else you splurge on, will be worth much more in 20 years if you save and invest it instead, he said.

Tronson recommends creating a balance sheet, too. Look at your incomes vs. expenses. Also, consider having a family meeting at the dinner table to talk about spending in certain areas.

"It's a good way for parents to teach their children money doesn't grow on trees," Tronson said.

If you're starting the year in debt, you're not alone.

"Most Americans spend more than they usually have, which is why we have the lowest savings rate in the world," Tronson said.

But if you have debt, should you save while you pay off bills? Or should you knock out debt first, if you can?

It depends on the type of debt, Tronson said.

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Date published: 1/1/2006