If you don’t know where you’re going, it’s hard to know how to get there.
Whether you want to buy a house, dig yourself out of credit card debt, invest your hard earned cash or simply break even in 2013, the best way to achieve your financial resolutions in the new year is to write them down and make a plan to stick to them, according to Kathleen Riester, financial readiness program manager at Army Community Service.
“Financial goals are very important and it’s a step that most people skip,” Riester said. “We know from research that people who write down their financial goals and objectives are most likely to achieve them, and not only achieve them, but are more likely to make smarter choices with their money, regardless of how much or how little money that is. The real power is writing those down.”
Once you know where you’d like your money to go, Riester said, make a spending plan, or a budget, to get it there. For individuals and families struggling with that task, or those who just need someone to point them in the right direction, ACS financial readiness program’s services, offered through Riester, include individual, couple and family counseling, budget development, financial planning, development of spending plans, debt liquidation services, assistance with reading credit reports, and classes in personal financial readiness and consumer affairs, including Dave Ramsey. Before meeting with Riester, clients must fill out a financial fitness worksheet, which gathers pertinent information such as fixed expenses, net income, credit card debt, loans and other variable expenses. After clients establish where they are today financially, they can move forward.
“You want to have some kind of road map as to where you’re going for the new year,” Riester said. “Having a plan is probably the simple most important thing to do, and that includes financial goals and objectives. Every financial goal and objective has a timeline and a dollar sign attached to it. This helps one think toward the future and get out of their immediate crises. Having a plan is very, very important for financial management.”
Riester encourages individuals to consider including these goals in their financial resolutions for 2013:
• Keep a stash of cash in event of emergencies. Riester recommends individuals and families put $5,000 in a money market account, which keeps cash liquid in the event of emergency, while reaping the benefits of receiving interest on the funds. “The important thing is you do have that set up in the event you have unforeseen financial crises so you can have a good buffer to ward off a financial downfall,” Riester said.
• Invest in your future. Once your budget has been laid out, prioritize your savings and investments, and make sure you diversify. “Don’t put everything in one pot,” Riester said. “The sooner one begins saving and investing, the more money they will have in retirement.”
• Know where your money and assets are going when you’re gone. You don’t have to have an estate to have an estate plan, but you do have to know how much you’re worth, Riester said. To determine your net worth, total up your assets and subtract your liabilities, and then make sure those assets are protected when you die by completing an estate plan. “It’s a matter of making sure that your assets and your estate are distributed according to your wishes,” Riester said. “It’s always a good time to do that when you’re alive.” Estate planning will be the topic of February’s Financial Matters 2013 workshop, Feb. 6 from 11:30 a.m. to 12:30 p.m. at ACS, building 3338 on Redeye Road. To register, email Riester by Feb. 4 at firstname.lastname@example.org.
• Protect your name and your bank account. Beware of online scams and identity theft, said Riester, who advises individuals to be extremely cautious in providing any personal information online or to individuals they don’t know, including name, address, phone number, Social Security number and place of work. “As the economy has suffered, there’s been an increase in scams and identity theft over the past couple years,” Riester said. “There are people out there who are pretty savvy and will try to send you an email that looks like it’s coming from your bank. Be very cautious about providing personal information online and if you get any kind of request question that.” To ensure your identity hasn’t been stolen, pull a free credit report each year, another crucial step in financial planning, and check your monthly banking and credit card statements carefully, she advised.
• Reach out for help when you need it. Riester is just a phone call away, at 876-5397, for civilians, active duty, Guard, Reserve and their families, all at no charge to them. Resources, including books and DVDs on a variety of financial topics, are also available for checkout. Riester reminds individuals that she is a financial counselor, not a financial planner; if you are seeking advice with investing or mutual funds, contact a professional planner.