Ring in the new year with healthy finances


Dec. 27, 2010 at 6:27 a.m.
Updated Dec. 31, 2010 at 7:01 p.m.

Thanksgiving's turkey is but a distant memory and Christmas' gifts have found permanent homes. That lighted globe in Times Square has even dropped, ushering in 2011 with a virtual snowstorm of confetti.

Yes, the winter holidays might have come and gone, but the season isn't over just yet.

There's still time to make new resolutions, including those of the fiscal sort. Here are a few tips to help you enter 2011 on healthy financial footing.

Reduce debt.

The less money you have going toward paying off what you owe, the more you have available to prepare for retirement or get through daily life.

Give your retirement accounts a boost.

Regardless of your age, you're another year closer to retirement. Maximize your 401(k)s or, if you don't have one, open an IRA.

Look for opportunities.

Environments like today's economy always provide some positives, such as low inflation and interest rates. Go in with a plan and work toward it. If you have no target to hit, you will miss it every time.

Budget your money.

Always shop with a list and track where your money goes each month. Also evaluate your spending. Is the item you're considering purchasing a want or a need?

Don't overreact to market swings.

People tend to make knee-jerk reactions any time the market goes up or down, but it's important to think long-term. A holding might drop one year but skyrocket the next. That's why it's also good to maintain a diverse portfolio, to protect against potential loss.

Rebalance when necessary.

Evaluate your holdings to see what works and what doesn't. That ensures your portfolio will reflect your current goals, risk tolerance and family situation. Look over your holdings at least once a year, but quarterly when possible.

Cut back on costs.

Try taking trips to the public library, rather than the bookstore, using 10 percent less shampoo and conditioner and opting for generic medications and products. Small steps such as these can add up to big savings.

Sources: Robert Steed, financial adviser with Edward Jones and Consumer Credit Counseling Service of South Texas



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