Good financial habits for a new year

As we begin a new year, it might be a good time to take a fresh look at you and your business' financial picture, set new goals and establish some new habits in 2010.

Many of us jump into January with great intentions of improving our finances. Yet for some, the goal of financial fitness fades into February then drops off the calendar entirely. One reason may be that most people don't know where to begin.

Here are seven ideas to help you stay on track:

Talk to your banker. One great way to get a jump start on a new financial plan is to meet with a personal banker or financial advisor. Just like staying on a New Year's diet, a little support and guidance from a financial coach can help you put together a great plan.

Set goals. You need to know where you're headed.  Write down your long-term financial goals – perhaps a down payment on a home, college education for the kids or paying off high credit card balances. Add short-term goals, such as saving for a vacation.

Be specific about the amount you will need and the target date for reaching each goal, then set up a savings plan that will get you there. Some financial institutions offer online tools that allow you to establish savings goals and monitor your progress toward reaching them.

Keep track. Add up all your expenses for at least a month. See if your bank has an online tool that can help you track your spending. With many online services, you can download transaction records directly to personal finance software, making it even easier to monitor your costs and keep track of every deductible expense.

Make two lists of expenses – essentials, such as mortgage, taxes, food and insurance and non-essentials, such as entertainment and clothing. You might be surprised at how much you're spending on the non-essentials.

Cut costs. How can you save when you spend every dime to meet expenses? You don't need to live like a miser to trim dollars from your monthly expenses, yet you do need to pay attention to every purchase and avoid impulse buying. Look again at those costs – you might find considerable savings.

Cut credit card debt. According to the Federal Reserve, consumer credit debt in the U.S. was about $990 billion at the end of 2008. The average amount of credit card debt per household is estimated at about $8,500.

If you have large credit card balances, consider a home equity loan to pay them off. The interest likely will be lower than that of credit cards, and your tax adviser can tell you if the interest qualifies as a tax deduction.

Be flexible. Treat yourself to small splurges once in a while and don't get discouraged if an unexpected expense throws you off your budget one month. Just get back on the financial fitness track.

The most important step you take on any journey is the first one, so jump right in to January and head down the road to financial fitness. Come next December, you'll be glad you did.


Amanda Dolley is Wells Fargo's community banking district manager for Clark County. She can be reached at 360.693.8348 or