It’s that time again.
Time to make resolutions that in years past you’ve probably broken before Valentine’s Day. In its annual New Year’s resolution survey, Allianz Life Insurance found that exercise or diet, better money management, spending more time with friends or relatives, volunteering, and getting rid of bad habits are among the top promises that people make.
Allianz found that 84 percent of the people surveyed said they would not include financial planning in their resolutions for 2013.
I thought this was odd, that people who said they want to get better at managing their money don’t see the need for overall financial planning. Well, the reason people see the two differently is that they don’t think they earn enough to worry about financial planning.
It’s worth setting New Year’s resolutions for your financial life. If you are not happy about how you handle your money, make a change. It’s also not enough to just focus on one area such as getting out of debt or starting the emergency fund. Your financial resolution should entail looking at getting your financial house in order.
But before you make any promises, you need to decide how best to go about keeping your resolutions. You need to determine whether you’re a do-it-yourself type or whether you need help to guide you to better money management.
Think of financial planning as you might think about getting a personal trainer, said Katie Libbe of Allianz.
And you don’t have to be a high-net-worth individual to seek the help of a financial planner. Good planners will focus on getting your financial house in order. They can help you develop a budget, look at your debts, taxes, retirement, and college savings, estate planning, and insurance needs.
There are plenty of planners who will work with people of all income brackets. One of the best ways to find one is to get recommendations. You can also find an adviser through the Financial Planning Association (www.fpanet.org). To find a fee-only planner, check with the National Association of Personal Financial Advisors (www.napfa.org). The Certified Financial Planner Board of Standards (www.cfp.net) also has a search tool for planners. Be sure you ask how your financial planner is paid, which can vary from a commission, hourly fee, annual retainer, or percentage of assets managed.
If you’re a do-it-yourselfer in other parts of your life but have a block when it comes to your finances, maybe what you need is step-by-step help. Fidelity Investments has a guide to keep you on track. Go to www.fidelity.com and search for “Keep Your Resolutions in 2013.” The company promotes its services, which I’m not endorsing, but you can easily click through to see the helpful monthly financial information, tips, and tools.
In January, you start by creating a budget. There’s a tool that allows you to develop a savings strategy for top goals.
Even before you make your resolutions, complete a net worth statement. Looking at your assets and liabilities may be the wake-up call you need. You can find a template for a net worth statement by going to http://wapo.st/TaJkCa. Or Google my third book, “The Power to Prosper.” You will find budget templates I created.
Even if you’ve failed to keep your financial resolutions in the past, try again this year. What’s the alternative?