New Year?s resolutions should include an assessment of finances.
“The first of the year obviously is a great time for people to really get themselves organized,” said Towson Certified Public Accountant Lyle Benson, of L.K. Benson and Company. “And I think it really starts from stepping back and taking a look at where you are financially ? as you organize your tax information.
“Then it?s a matter of thinking about what your goals are,” Benson said, “and New Year?s resolution time is a great time to do that [and prioritize them].”
A member of the American Institute of Certified Public Accountants, which describes such goal-specific assessments as a “rarely verbalized” exercise in “values-based financial planning,” Benson subscribes to AICPA?s full checklist of turn-of-the-year pointers in personal finance.
It is a table of stock-taking that 25- to 34-year-olds, especially, would be well-advised to consider, as this age group faces bleak financial prospects due to poor spending and saving habits, according AICPA spokesperson Joel Allegretti and a recent institute-commissioned study.
These habits are reflected in a decline ? from65 percent to 55 percent between 1984 and 2004? in the group?s holding of interest-bearing savings instruments and a same-period drop in its median net worth from $6,700 to $3,700.
Another AICPA New Year?s tip, tailored especially for the financially faint-hearted, is the “one step at a time approach.” It consists of listing all debts and financing costs and quickly paying off one or two of the smaller offenders. “This gives the person a feeling of empowerment,” the advisory says, “and an incentive to move on to bigger [debts.]”
The list goes on ? advising destroying all but the lowest-interest credit cards; paying more than the cards? minimum monthly payment; taking full advantage of employer or individual pension plans; and updating wills, asset-value inventories, and records for safe deposit boxes ? noting that additional information can be found at www.feedthepig.org.
“It?s a great time to update your will and estate-planning documents,” Benson said. “When you?re updating your assets … you also want to make sure your will and estate plans are doing what you want them to do.”
