Money resolutions

Published: Thursday, January 7, 2010 at 6:01 a.m.
Last Modified: Wednesday, January 6, 2010 at 3:16 p.m.

Des Moines, Iowa

New behaviors like saving more and spending less are carrying over into the new year.

At least that's the best intention of many consumers making financial resolutions for 2010.

A couple of recent surveys indicate a majority of respondents want to resolve to manage their money better next year.

One of the highest goals in a recent survey by online brokerage firm TD Ameritrade was starting or adding to a retirement savings account.

"Perhaps we're seeing signs of the lessons learned from a struggling economy," said Diane Young, the company's director of retirement and goal planning.

The recession led many investors to retreat to the sidelines and for some next year's goal is simply to put their money back to work.

Tom Trabocco, 68, resolves to keep a close eye out for stocks worthy of his investment, but he's concerned about high unemployment and other factors that might stall the economy.

"I want to wait and if I see something good I'll take a shot at it," said Trabocco, a semiretired commodities trader from Rumson, N.J.

"I'm not a long-term investor at this stage. It's hard to take a long position."

If you're among the masses who are planning to make investing, saving or managing money a financial resolution, keep in mind these five tips that should help you succeed:

1. Set a well defined goal. For example, you may have a goal to start an emergency fund.

Figure out how much it would take to pay your household necessities for three months or six months, whatever cushion you determine would give you peace of mind.

Then start setting aside enough from each paycheck to reach your goal.

2. Budget for it. Allocate money every month to your financial resolutions, and trim expenses that may be keeping you from reaching your goals.

Budgeting tools are available online. offers a useful free tool at

3. Pay yourself first. Consider using automatic payroll deduction or a monthly deduction from your checking or savings account.

View your savings as a bill that you need to pay like any other.

Giving it a higher priority will ensure that it builds over time.

Keep in mind an online savings account will limit your immediate access to funds so you won't be as tempted to raid your savings for purposes other than your intended goal.

4. Keep your list short. Too many resolutions will lead to frustration and you'll give up.

A list of three to five goals can optimize your momentum.

5. Make it personal. Create a list by thinking about what worries you, the things that keep you up at night.

Accomplishing these tasks will clearly remove some stress.

Don't just set a goal because it's what you think you're supposed to do.

A goal can also be something that excites you, perhaps a European vacation or saving for a down payment on a house or a car.

It's one thing to make a resolution about money, quite another to keep it. The TD Ameritrade survey showed 60 percent of resolution makers last year are resolution keepers.

That means a lot of us fail.

Psychotherapist Judith Barr says for many, annual resolutions are not all that serious. In many ways, New Year's resolutions have become a joke, she said.

If you're serious about making a change next year, whether it's to lose weight, quit smoking or fix your finances, you need to make a promise to do it no matter what obstacles surface.

"Make a commitment that's solid and know every step of the way that things will come up," said Barr, who practices in Brookfield, Conn., and is the author of "Power Abused, Power Healed."

"We need to learn not to use them as justification to break the commitment, but to explore them."

One thing is clear in the current environment.

People are determined not to get stuck in another economic downturn without enough knowledge to make informed decisions.

More than 80 percent of participants in a recent Fidelity Investments survey said they are likely to learn more about financial topics in 2010.

The two most mentioned are setting financial goals and saving for retirement.

Perhaps most important, nearly 90 percent said the economic events of the past year will give them impetus to stick with their resolutions.

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