Option 1st Financial Blog

Top 10 New Year's Resolutions from Year to Year!!!

• Make more time for family and friends
• Quit smoking and drinking
• Start exercising
• Go back to school / take a class
• Get out of debt/ save more money
• Advance career, make more money
• Get into philanthropy and community involvement
• Take a vacation
• Lose weight
• Get out of a bad relationship / find true love

Are any of these your resolutions for 2009, 2008 or 2007? An article written in the New York Times states that four out of five people who make New Year’s resolutions will eventually break them and that, a third won’t even make it to the end of January. Well, the end of January has come and gone and the burning question is, are you sticking to your New Year’s resolution?

You may be asking yourself how does my New Year’s resolution relate to personal finance which is the focus of this Blog? Well, getting out of debt, saving more money and taking a vacation consistently land as top ten resolutions every year. We can't help with exercising and weight loss, or
getting out of a bad relationship/finding true love (visit Dr. Phil's website for this one) and some of the others but Option 1st Financial can help with 3 of the top 10 resolutions.

Let’s start with an easy one: vacation! The data indicates that many people do not a take vacation because they lack the resources or can’t take the time off from work. Well, the vacation promotion offered through Option 1st Financial's Blog eliminates one of the two barriers (i.e., lack of resources). So, if taking a vacation is one of your resolutions for 2009, you can mark it off your to do list by either subscribing to this Blog or by telling a friend. As a result of either action, you can earn a vacation to any one of twenty-two destinations with your significant other or the entire family. Here’s the best part about the offer: no time share presentation is required!

Now, let’s tackle the more challenging New Year’s resolutions related to personal finance: getting out of debt and saving more money. If you resolved to get out of debt before 2010, you share this goal with millions of other Americans. It probably seems like a fairly overwhelming task and while it can be, it does not have to be at all!

It obviously will require tremendous discipline and sacrifice but it is not impossible! First, you need a plan of action. A well conceived plan does not guarantee success but it does increase the probability of success. The lack of a plan increases the chances of failure because it is hard to reach goals without a roadmap. Your plan of action should have small attainable goals with action steps. If you establish unrealistic goals, you set yourself up for failure! 

I can Blog extensively about this topic but I might loose your interest in the process. If you need help with developing a plan of action and action steps, give me a call and I would be more than happy to assist you with this task. 

As for saving more money in 2009; this too is a challenging but not an impossible task! It certainly is an important goal given the uncertainly of this market;  job insecurity; and a 7.6 percent unemployment rate, the highest since 1974 and projected to grow as high as 9.0.  

Now, how do you start to save; especially when it seems like all of your income is spent paying bills? Well, first, you need to establish a spending plan. The number one rule of a spending plan is that you can't spend more than you make. So, if you earn $2,000 a month, you should not spend $2,050 a month; in other words, all that you earn plus $50 charged to your credit card. 

You can refer to my home page and click the budget tool link for access to an online template that will allow you to develop a spending plan/budget. So, you have a spending plan, now what next: stick to it of course, but also let's talk about a strategy for saving.  

Did you know that if your net pay decreases, that you will adjust your spending habits accordingly? I am not suggesting that you reduce your take home pay but here is what I am suggesting. Enroll in an automatic savings plan; it's referred to as “dollar cost averaging” in the finance world. What does it mean? Well, if you have direct deposit, ask your employer to automatically deposit an amount that you determine (recommend 10% of your net income) into a savings account before you get your hands on it. 

In essence, you would have 10% deposited into your savings account and the remaining balance into your checking account to pay your bills. Unless you are extremely disciplined, it is hard to save money without a built in mechanism such as an automatic deposit into a savings account.

If you are like most people who say “I will deposit the money that I have left over into my savings account after paying my bills”; you generally have what's left over: Nothing, because you spend it all!  

If you are someone who constantly withdraws money from your savings account, you should consider creating a barrier to accessing your money, such as a Certificate of Deposit (CD). A CD is good savings instrument because it is still liquid, meaning that you have immediate access to your money in case of an emergency but a CD should deter you from accessing it for everyday expenses because of the penalties for early withdrawal.

This too is a topic that I could write about extensively but a Blog is not the appropriate forum. Therefore, give me a call if you would like help with implementing a savings plan and I would be more than happy to help you formulate and execute a plan.

As always, I hope that you find these tips helpful and that you continue to come back to our Blog for information on how to improve your personal finances and for wealth building strategies.

Best of Luck!