A New Year for Your Finances

As the New Year begins, ask yourself the following question - When it comes to your family's finances, was 2011 a good year, a mediocre year, or one you'd like to forget about? Regardless of how you answered, the start of a new year provides a great opportunity to assess the current state of your finances and set new goals for the coming year. Below are several financial resolutions that can help get your 2012 off to a strong start.

Resolution 1 - Save or invest more money.

Many people took the opportunity to cut down on spending and pay down their debts in 2011. While this is a good idea, also aim to increase the amount of money you save or invest in 2012. Whether you do so through increasing the amount withheld in a retirement savings plan, or increasing the amount you transfer each month to a savings or investing vehicle, every little bit can add up over the year. At a minimum, be sure to establish an emergency fund, which contains at least three to six months' worth of all monthly living expenses, in cases of unforeseen circumstances such as a job loss, disability or worse, the death of an income earner.

Resolution 2 - Review your credit report.

Visit www.annualcreditreport.com and obtain your free copy of your credit report from Equifax, Experian, or TransUnion. This is the only site where you can obtain your free report through the U.S. law that gives you the right to get your free report from each of the three, major credit reporting agencies once every 12 months. (If you want it, your actual credit score will cost a small fee.) Check your reports for errors and have them fixed. With millions and millions of pieces of data being exchanged daily, errors are bound to occur.

Resolution 3 - Protect against identity theft.

Still one of the fastest-growing crimes, identity theft can wreak havoc on its victims. Taking steps such as reviewing each transaction on all of your financial statements (bank, credit card, brokerage), shredding all sensitive documents once they're no longer needed, and carrying with you only the cash or credit cards you may need for the days activities can help guard against this crime.

Resolution 4 - Review your insurance coverage.

Whether it's life insurance, health or disability insurance, home or auto insurance, perform a review to make sure that the amount of coverage, and the premiums you're paying for that coverage, is still appropriate for your life stage and your family's financial situation. A marriage, divorce, birth of a child, job change or other major life event can be an indicator that your insurance needs have changed also.

Resolution 5 - Update your list of resume, accomplishments, and goals.

Documented goals can help you remain focused in your efforts. Make it a priority to update your resume, adding to it your major accomplishments in 2011, being specific about any results or cost savings an idea you implemented created for your company. Set new goals for this coming year - professional, family, financial or others. Detail what's necessary to achieve each one in 2012 and make sure to check on your progress every three or four months. Measuring your actual results vs. your plan can inspire you to keep up your good work, or help get you moving if you are lagging behind in reaching them.

Regardless of what the economy may hold for you in 2012, resolve to proactively manage your finances even more this year and make the most of your money!