Resolutions for 2009 to develop Your Finances

Resolutions for 2009 to develop Your Finances

Have you made any resolutions regarding your personal finances last January? If so, how did you do? Did you achieve your economic goals, or was this year an overall financial scrub down for you? While December 31 is a day to reflect on the year gone by, January 1 is a time to look forward to the New Year, use this opportunity to review your financial scorecard for the past year and make any possible improvements where necessary for the New Year.

The superior news about New Year's resolutions is that you dig up to make new ones each year. It is even better if you can keep the superior ones from the past year. In this article, we provide some New Year's resolutions to help you develop your finances.

Reset Your Retirement Savings

At work, you almost certainly have the chance to save for your retirement during a 401(k), 403(b) or 457 plan sponsored by your boss. If so, reflect on that most people find it easier to sail through out their retirement offerings by budgeting to contribute a set amount each month.

Employer Plans

If you have access to a 401(k), 403(b) or 457 plans at work, consider instructing your boss to withhold $1,375 per month in the course of salary deferrals to make sure that you reach the highest limit of $16,500 in 2009. If you will be 50 or grown-up by December 31, hit that amount to $1,833.33 per month to account for the extra $5,500 in "catch-up contributions" you are allowed to make. If you are paid on some other, frequency, such as weekly or bi-weekly, simply split the contribution boundary by the number of your pay periods for the year.


Other Resolutions

Rebalance Your Investment Portfolio

The preceding year was dissimilar than any other year; with some sectors performing arts better than others. Chances are that the sectors that performed the best last year may not enjoy a repeat performance this year. By rebalancing your portfolio to its original or updated asset allocation, you take steps to lock in gains from the sectors with the best returns, and purchase shares in the sectors that have lagged behind last year's leaders.


Pay down Your Credit Cards.

If you owe money on your credit cards, find out how much you can sensibly afford to pay off throughout the year. For best outcome, try not to accuse additional purchases on those cards while you are trying to pay along what you owe. If you have elevated interest credit card balances, consider whether it would be more beneficial to pay off those high interest debts or to add to your savings.

Review Your Credit Report
Review your credit report, and take steps to repair any negative aspects. Now that you're entitled to three free credit reports each year, there is no excuse for not reviewing what is one of your most important financial reports, especially since errors in these reports are not uncommon. In the U.S., you can order your free credit report at AnnualCreditReport.com. A poor credit report could adversely affect the amount you are able to save, as it could result in you paying higher interest rates on loans, which reduces your disposable income.

Review Your Life Insurance and Disability Insurance Needs
As you move through your career, your life and disability insurance need to continue to change. Give some thought as to how much protection you need and compare it to the coverage you currently have through your employer's benefit package. Consider whether you need more or less life insurance, and whether your needs would be better satisfied by term or permanent life insurance. Also, review your disability insurance coverage to determine whether you have enough coverage.

Avoid Resolution Pollution
Be cautious about setting too many or unrealistic financial goals. Otherwise, you may be unable to accomplish any of them. Take this opportunity to restate your financial resolutions simply and clearly for the new year and rest easy knowing that this is one resolution you can keep. It may be a good idea to maintain a checklist to keep track of how you are doing throughout the year, so that you can make any necessary modifications. Consider meeting with your financial advisor to review the goals and objectives that you have established.