Financially speaking, 2008 was a real bummer for many Americans. Lots of us are licking our wounds, hoping the losses aren't as dismal as the press keeps proclaiming. If you're tempted to start a bonfire when those year-end investment statements arrive in the mail, you're not alone.
Will this year turn out better? Of course there are no guarantees. But whether the news is good or bad, taking stock of your financial picture shouldn't be considered optional. After all, this year you'll need to make financial decisions regardless of the economy's fluctuations.
Some folks will face lay-offs and foreclosures; others will enter an uncertain retirement; others will want to take advantage of bargain investment prices and home values.
Regardless of your situation, early in the year is a great time to step back and take a critical look at the path ahead. Here are three suggestions for steering your financial course in the coming year.
- Save for a rainy day.
If you're facing a job loss or your investments have tanked, you may be tempted to end all savings contributions. Don't.
When folks have no savings to draw on, they often rely on credit cards to fund living expenses. That's a surefire way to amass unmanageable debt. Even if your income has declined, try to set aside at least a portion of your paycheck to cover emergencies. A rainy-day fund can keep you afloat when the floods come.
- Make out a will.
This isn't something that should be postponed, especially if you have dependent children. If you already have estate documents in place, now's a good time to review your beneficiary designations and/or guardians.
Ten years ago, Uncle Joe may have been a great choice as your child's designated guardian. He may not be the best candidate now.
- Live within your means.
Of course, this presupposes that you know what your "means" are. If you don't know where you stand financially, it's time to get organized. Widely available financial software can help.
Once you get a handle on your income and expenses, use that information to curb impulse buying and avoid debt.
Regardless of how the overall economy fares in 2009, taking time to set your financial house in order can pay dividends in the coming year. If you need help, give us a call.
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