Standard New Year's Resolutions Not Right for Everyone
This is the time of year when well-meaning people make commitments with the intent of improving specific areas in their lives. However, even the most noble of intentions can backfire.
"There's a right way and a wrong way to do most things, and New Year's resolutions are no exception," said Gail Cunningham, spokesperson for the National Foundation for Credit Counseling (NFCC). "Doing a reality check, one which includes being honest about your limitations, is key to identifying the proper goals and meeting those objectives."
To help people evaluate some common New Year's resolutions that might not be right for them, the NFCC suggests considering the following tips before making 2013 commitments:
Pay off debt - If increasing payments to creditors means compromising the timely payment of priority obligations, it's not the proper use of money. Keep the home life stable by ensuring that the rent or mortgage is current, utilities are on, food is in the pantry, gas is in the car and medicine is purchased. The goal is to have all debt obligations met in a timely manner, but when money is tight, paying in the proper order is essential to prevent a bad financial situation from becoming worse.
Begin exercising - Regardless of how determined one might initially be, signing a long-term contract at a gym or exercise club could result in wasted money if not used. Also, costly home exercise equipment might end up in the next garage sale. To test your exercise staying power, first look for free or less expensive options such as running, exercise tapes, taking the stairs instead of the elevator, parking far from the door, or joining the dog for a brisk walk.
Save money - It is true that having a financial cushion provides a safety net in times of emergencies, but paying double-digit interest on credit card balances is definitely the elephant in the room when it comes to saving. To find money to begin or increase savings without taking away from debt repayment, each time an item is purchased on sale, put the amount saved into a designated savings account. After all, savings from a sale isn't really savings at all unless it's tangible.
Start investing - Everyone needs to plan for their retirement, but an amateur playing a professional's game can be dangerous. An effective way to build retirement security is to invest through monthly contributions to an employer's retirement plan. On top of the tax advantages, these plans often include professional guidance which can be safer than independently investing.
Increase skills - Increasing knowledge is hard to argue against, but making a case against taking on debt that can't be repaid is easy. It is no secret that student loan debt has a stranglehold on many young adults who assumed that a good education would equal a good job, one that would provide enough income to repay the loan. As an alternative to taking out a student loan, first explore which grants might be available, as a grant does not have to be repaid. Also, consider skill centers that offer job retraining and teach computer courses, as many of these centers offer their services free of charge to consumers. Obtaining additional CEUs is another cost-effective way to improve skills and impress an employer.
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