Today Show: New Year’s Money Resolutions
I stopped by the NBC Today Show where we discussed new year’s financial resolutions and how to stick to ‘em. Not to mention I got put on the spot for my stock picks. Gulp!
Check out the clip below. My full write-up on 2010 resolutions follows.
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Financial resolutions in 2010 will – as always – be one or a combination of the following: save more, spend less. What’s different this year is that more Americans are hoping to regain a commitment to the market and rebuild their confidence levels after last year’s economic and market slowdown. Many of us went to the sidelines last year as the stock market plummeted. Now a majority of us hope we’ll find our bearings in 2010 and recommit to investing and achieving our financial goals. In fact, more than 70% of individuals hope to increase their confidence level in their finances with their resolutions based on a recent survey by Fidelity.
Here are the top 3 Resolutions and the effective habits that’ll help you to stick to them!
1. Save more, spend less.
This is always #1 resolution each year. Make sure that if you’re carrying any balances from 2009 – especially any from the holiday spending period – you commit to getting that paid down by the end of February before the interest really starts to weigh you down. Commit to a cash existence to help pay down the debt that you have. As for saving? The good news is we got back in the habit of saving on 2009. The savings rate is around 5%, up from 0% before the recession started. Build on that momentum in 2010. To push you to save more create visual reminders of your goals for the new year. Have images of your goals around the house and on your laptop/phone to give you that visual cue to save. If you want to travel, maybe it’s an image of the Eiffel Tower. If you want to save more because you want to buy a house this year, do what I’m doing and bookmark the NY Times real estate section on your laptop browser. Another way to stick to this resolution is to force yourself to be accountable to someone beside yourself. Identify someone in your life that can help keep you accountable. Another way to approach this is to have a money buddy. Just like when you want to lose weight you do it with a friend to encourage each other and to hold each other back from temptation. I joke that I’m going to call my mom more often in the new year to share her my goals and so that she’ll ask me how things are going. Keeping my mom informed of my financial goals will make sure someone (besides myself) keep me accountable. Finally, another way to stick to this resolution is to make small changes that yield big results over time. If one of your resolutions is to save more money then do so by committing to a small regiment that will reap big savings rewards over time. Examples: preparing more meals from home, getting your prescriptions mail-ordered instead of getting them from the pharmacy, which can save 30 to 50%.
2. Become more confident about the market.
Knowledge equals confidence. In 2009 you may have kept yourself in the dark because you couldn’t bear all the disappointment. This year it’s about mustering the confidence to face reality and understand your obligations and see how you can make the most of your finances. The habits? Stay informed. Take a good look at your 401k statement, your daughter’s 529 plan and any other of your long-term investment plans. If you have questions or concerns reach out to your plan managers, have an informational meeting. To keep up with your confidence, Stay Connected/Network. Share goals with loved ones, share advice. All of this can lead to being better informed and it can help you down the road when looking for new work, starting that business or just wanting some guidance with a financial matter.
3. Put my money back to work.
What does this mean? Putting your money to work means investing in things that will reap relatively better returns than just socking money away in a traditional savings account, a CD or money market fund. You may have gotten scared last year and shifted your money into these safe havens, but if you really want to put your money to work you need to be a little more aggressive with your money, especially for folks who still have a ways to retirement. How? Start by investing a bit more and a little more aggressively in your 401k, your IRA and your stock portfolio. Another way to put your money to work is to invest in yourself. One trend I saw in 2008 was many people – especially women – investing more time and some of their savings in starting a side business from home or on the internet. A lot of people also went back to school to earn a higher degree or to earn a certificate in an area that will allow them to make more money down the road. These are all examples of investing in yourself and putting your money to work.
