A Fresh Financial Start

On Friday, January 1st, I went out for a walk.  This is not unusual for me as I might go for a walk several times a week, venturing in to town where several errand stops, like the bank or post office are a reasonable jaunt.  What was unusual was seeing lots of other people out walking, when my usual 40 minute venture might be met by 1-2 persons, usually taking their dog out for a walk, on this day, I saw at least seven groups of people.  Then, I remebered it was January 1st, a new calendar and a time when everyone aims for a fresh start and tries to hold to their New Year’s Resolutions of getting more exercise.  I bet the gym stays packed for at least the first two weeks of the year. Like exercise, most people also make financial resolutions and think of the calendar rolling over as a chance of starting fresh with new goals for saving, investment, paying down debt and making other good financial choices.  This is what I plan to do this year:

–Continue to put aside as much as possible for retirement — I feel that I did well with this last year and will continue with monthly auto-transfers to my investment accounts, right now, on the order of 20% of my net paycheck.  I will look to maximize tax-advantaged options as much as possible.

–Be more pro-active with investment strategies –  in the past year, I felt that my investment strategy was okay, but that I did not move quickly when I identified specific opportunities and risks in my portfolio.  For the next year, I plan to be more pro-active, (buying and selling with less hesitation), as well as continue research into ETF, alternative investment, and dividend paying investments. Right now I’m looking at high yield funds and REIT ETFs.

–Maintain a watch on regular spending items – last year, I kept a log of each spending item, including trips to the grocery store, stamps, meals out, etc… Although this took some time to maintain, I found that recording each expenditure helped me to keep spending in check and to build realistic monthly budgets. For last year, I substantially underspent in the grocery, household item, and clothing budgets, while I overspent in restaurants and office supplies (computer stuff).  Overall, the total budget was under by about 3%. I will try to keep the log through 2010 to keep me on track and organized.

–Have better plans for long-term savings goals – there are two savings accounts that I maintain without thinking too much about how they might be used or if the monthly amount I allocate is reasonable: travel and equipment (like new computers, cellphones, or furniture).  Going forward I plan to put some more structure behind these investment areas, looking at what specific goals I have in mind for the future.

I would love to other people’s financial plans for this year.

shared at this week’s Carnival of Personal Finance