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.
Stick to a budgetOn 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.
Pay down debt, and saveIf 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.
If it's a low-interest loan, perhaps a student loan, it might be smart to save while you pay off the debt, Tronson said. He defines a low-interest loan as something around 4.5 percent or lower.
Higher-interest loans, for automobiles or credit card debt, should be vaporized ASAP.
"You've got to get rid of that first," Tronson said.
If you're saving for retirement--and you should be, Tronson and Ross agreed--consider looking into maximizing your company's 401k match. Then, if you want to save more, consider opening other forms of retirement accounts, such as a Roth Individual Retirement Account.
A good rule to follow when choosing between saving and paying down debt is whether you can earn more money by saving and investing than paying off the debt, Ross said.
For example, if you're paying off a 4.9 percent car loan, it may make more sense to invest money in a bond earning 6 percent interest.
"You're making more than the loan is costing you," Ross said.
Consider calling in a proIf you feel overwhelmed, it may be time to make an investment in some professional assistance to achieve your resolution.
"I don't think anytime is the wrong time," to visit a certified financial planner, Ross said. "There's something we can do for any person in any situation."
The only exception may be a person in serious debt. If your top priority is digging yourself out of the red, you may want to see a credit counselor, who specializes in this type of financial assistance.
Since money can be a sensitive subject, seek out someone you feel confident sharing confidential information with.
"You've got to sit down and look at someone face to face and feel comfortable," Tronson said.
Make sure the person has a college education, and is licensed to be a fee-based financial planner, he recommended. The Federal Trade Commission offers advice on how to choose a credit counselor at its Web site on credit, ftc.gov/credit.
If you're making a serious adjustment to your life, such as getting married, having children, or anticipating a raise, it may be the perfect time to seek financial planning help, Tronson said.
And people should always be looking ahead to retirement, Ross said.
"If you know from this point going forward, 'I don't want to work for somebody until I'm 89,' go talk to somebody about that," he said.
To reach KELLY HANNON:
Email: khannon@freelancestar.com