Hit the Ground Running in 2012 by Slowing Down

by Teresa Ambord

The new year feels like a time for a fresh start for most of us. Whether or not you are a person who makes New Year’s resolutions, you can resolve to be wealthier in 2012.  Of course wealth takes many forms. Even the richest person is a pauper if he or she doesn’t have peace of mind. As the new year begins, you can hit the ground running for the entire year by slowing down long enough to take stock of where you are. Here are eight areas of your life to ponder this month.
1. Start with the big picture.  Take a look at the year ahead of you as a whole.  If you look at what you want to accomplish over the year and for certain big events that you can anticipate along the way – a graduation in June, a grandbaby expected in September, a trip at Christmas – you can create an overall budget that should prepare you for those events.  A study in theJournal of Consumer Research shows that people who plan this way are able to estimate their expenses more accurately. One reason may be that they are less likely to be taken by surprise.
·         When you are looking at the year ahead of you, be sure to build in some potential cost increases.
·         Don’t forget to add in the possibility of major repairs that you know aren’t far off, like a new roof.
2. Review your portfolio.   You don’t have to be an expert, but you should have an idea where your money is and how it’s doing. If you’re like a lot of people, the onslaught of bad news over time has caused them to stop paying attention. But financial experts say that the people who do this are the ones at greatest risk.
·         Take a little time to review the decisions you made earlier to ensure you are still happy with them. If not, make changes.
·         Your financial adviser can provide guidance, but you can also find information about financial planning online. But before you jump, carefully evaluate the advice you read to see if it truly fits your situation in life.
3. Give your estate some thought.  When was the last time you looked at your will? Has your family changed due to marriage, divorce, birth, death? If so, does your will reflect those changes?
·         Sit down with your family members and let them know what arrangements you have made.   Doing this at a time when all is well can help you avoid bad blood among your heirs (or wannabe heirs) later. It’s not a pleasant topic, but talk to them about your final wishes. Have you filled out a “Do Not Resuscitate” form? Do you own a burial plot? When the time comes do you wish to be cremated?
4. Get your papers in order.  
·         Are you able to quickly locate important information when needed? For example, insurance policies? If disaster strikes, you may have limited days to file a claim, so be sure you can quickly lay your hands on your policies and other vital information.
·         What about warranties? Do you know where they are stored?  If you can’t find them you may end up paying a bundle for repairs that should be covered.
·         If you should lose your wallet or if you find you are the victim of identity theft, can you quickly determine who to contact? You should have a list of contact information for canceling credit cards and notifying your bank if necessary.
5. Consider your expenses. If it’s been awhile since you reviewed how much you are paying for such things as insurance, cable TV, your phones, etc, it’s time to do some comparison shopping. You may conclude that you don’t want to cut back yet, but at least you’ll have an idea what’s out there.
·         What have you used a lot in the past year, and what has gathered dust?  If you pay for premium channels on TV but seldom watch them, maybe it’s time to dump them. On the other hand, a review of your TV habits may show that you could save money if you bundle services. Talk to your service providers to find out what is available.
·         Are you paying for a fancy phone that you mostly use for emergencies?  Maybe a simple prepaid phone would be adequate. Or, if you are looking to cut costs switching to a prepaid phone would make it far easier to control what you spend on calls.
6. Create an emergency fund. If unexpected expenses arise — like a death in the family that will require spur of the moment travel — will you have to get last minute financing that will cost a lot in interest charges?  Or you could face penalties if you have to pull money out of your pension plan or high-yield investment.
·         The amount you will need depends on your financial situation. Some experts say one month of living expenses while others say six months or more. Also, if you can reasonably foresee major expenses in the coming year you should include them in your emergency fund.
·         If possible, keep your emergency fund in an interest bearing, easily accessible bank account.
7. Support causes you care about.  Charities have been hard hit by a lack of donations this year.  If certain causes are dear to your heart but you always have empty pockets when the calls for donations come, incorporate some planned giving into your budget. If you generally give an annual gift in December, consider breaking it into 12 parts and contribute monthly instead. Charities have expenses all year round, but often have to wait for Christmas goodwill to set in before they get the bulk of their donations.
8. Pare down.  Most households include (or are stuffed full of) items that are seldom used and would barely be missed if they were gone. So why not take some time in January to get rid of extras.
·         Donate good used items to charities like the Salvation Army. You get a tax deduction and they get merchandise they can turn into needed revenue.
·         Have a garage or yard sale.
·         Good condition or unique items might be sellable on eBay or at a consignment store.
·         Things that are merely taking up space in your closet may be a treasure to your grown kids or a family that has much less.
Teresa Ambord is a former accountant and former Enrolled Agent for the IRS. Now she’s a full-time business writer from her home in rural northern California. She also writes short stories for families from a Christian worldview, available in Kindle version at Amazon.com. Check out Material Girl, a short Christmas story about a girl who is determined to receive expensive presents in a year when the economy has rocked her family’s finances.   Gerard T. Rubble: He’s Nothing But Trouble, a story about a bully, that takes place at Thanksgiving, but is entertaining all year round. For eBook or paper versions visit Teresa’s Website at Ambertrees.com.

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