Q&A with Sue Lynn Sasser
Beginning of year is good time
to think about financial future
Q: What are the smartest financial resolutions for 2013?
A: It's always good to focus on the basics, especially increasing savings and paying down debt. A new year is a great time to review your spending habits and adjust your budget accordingly. Track your spending for at least two weeks to see where your money goes; then you can find ways to cut expenses or offset increases in another area. It's also a good time to review insurance policies and beneficiaries to be sure they are current and the coverage is what you need.
Q: What are the least wise?
A: Focusing on only one aspect of your finances is generally not a good tactic. Taking a holistic approach where you can see the relationship between income and spending is generally best. Also, reducing retirement contributions or borrowing from a retirement account to cover other bills or current needs is rarely a good idea. Doing so reduces your future income and it's virtually impossible to replace.
Q: Which resolutions need caution?
A: Be careful about spending or overspending on the unnecessary. That may include gym memberships, home equipment, special diets or other “health” kicks. Unless you are totally committed to making a change, that's money wasted. You might even start with a less expensive option, such as walking, to measure your commitment. Also, be careful about spending those tax refunds on something frivolous. It's not free money. It's your earnings and should be treated like any other household income. You may even want to review your withholdings to increase your monthly income instead of waiting for the refund check. Last but not least, be careful about overreacting to the news headlines. Saving and investing is for the long term and still important for your financial future.
Q: Where should one start?
A: You and only you can determine what is most important. Those goals and priorities should drive all of your financial decisions.
PAULA BURKES, BUSINESS WRITER