Financial Resolutions Worth Keeping in 2015

It's the start of the New Year, and that means consumers are making resolutions—again. The top three financial promises that appear year after year, according to research from Fidelity Investments, include: saving more money, paying off debt and spending less.

As resolutions go, many are often broken. Still, Fidelity says of those who made a financial resolution last year, more than half say they are better off financially

Even better news: an overwhelming majority of those who set out to improve their finances at the start of the last New Year realized at least half of their goals, while nearly a third achieved their financial goals completely. 

Financial resolutions are no easy feat, but they are manageable. Here are four to keep in mind, not just in 2015 but throughout the arc of your life.

Keep track of spending!  One of the most important things you can do is to keep track of your spending. You cannot save money if you don't know where your money is going. Financial apps like Mint.com are free and help track your spending and offers many charts to show you exactly where your money is going.

Review your essential and discretionary monthly expenses. Determine whether it makes sense for you to cut costs, pay down debt, or save more. Start by taking these small steps, which everyone should be able to do.

Create a budget!  Create a budget and stick to it throughout the year. Doing so can help you find more money to save.  If you haven't already done so, start building a liquid emergency fund. Ideally, you'll need six months' salary to cover expenses in a pinch. But you can begin small, mainly by saving loose change: By just putting aside 50 cents a day, over the course of a year you can save more than 36 percent of a $500 emergency fund.

Most people may think it's not worth it to put aside 2 quarters a day, but the reality is that many people can do so—and the numbers show that it adds up over time.

Pay down credit card debt!  The challenge that most consumers find toughest is one that can be conquered with a few small steps. The first is reviewing your credit card bills.

Many people are accustomed to charging their credit cards, but many don't actually sit down to review important information. If you do, you will realize the account that is doing you the most damage is the one with the highest interest rate.

Start there and pay the most expensive balance first. Borrowing money for things you can't afford (or don't really need) usually gets you into trouble over the long term, because the interest rates you pay every month on credit cards can often derail your efforts to save money.

Call your credit card provider and ask for a lower interest rate. If you're a good consumer and have made timely payments, they may be willing to lower it for you.

If you're considering doing a balance transfer, you should first get out your calculator. There are fees associated with transfers, so you want to make sure the lower interest rate offsets the fees. Many credit cards in the New Year offer zero percent interest rates for a limited amount of time. 

You can be a savvy consumer and make that work for you if you're very disciplined. That means you'll need to fight the temptation to use that newly cleared card, while also committing to paying off the balance you moved over in a timely manner.

Focus on retirement!  Retirement is not what it used to be. Luckily, however, in the New Year you can save more for retirement on a tax-deferred basis. 

The limit on 401(k) contributions has increased by $500 to $18,000, from $17,500. Review your benefits to see if you're taking advantage of your company's match program.

If you're 50 and older, you can take advantage of the "catch up" contribution, which has also increased to $6,000 from $5,500. According to the Plan Sponsor Council of America, 97 percent of all 401(k) plans permit catch-up contributions.

Contribute to, or open up, an individual retirement account (IRA). Many tax-planning strategies end when the new year begins, but that's not the case with these accounts. You can open a Roth IRA or a traditional IRA, or contribute to an existing one, until April 15.

That way, you potentially reduce your taxable income, dollar for dollar, subject to phaseouts based on income.

Reposted from: http://www.cnbc.com/id/102304894#.

Achieve Your Goals in 2015!

Make 2015 the year that your dreams come true!  Setting realistic, measurable goals will help you achieve what you've always wanted.  Not sure how to start?  Here are some tips to set achievable goals.

Think big.  What is one thing that would improve your life dramatically?  Whether it pertains to getting healthy, ridding yourself of debt or getting a promotion at work, think of one thing that would give you the biggest boost and turn it into your goal?

Analyze your habits and behaviors.  Don't let bad habits and behaviors sabotage your hard work.  Once you've thought of a goal, ask yourself these questions:

• What current habits or behaviors will help me reach my goal?
• What current habits or behaviors will impede my efforts?

For example, if your goal is to run a marathon and you're already running or working out a few times a week, your current fitness habits will help you reach your goal.  However if the last time you ran was during an elementary school filed day, you'll have to make running a habit so that you can can achieve your goal.

Write it down.  Studies show that writing down your goal will improve your chances of achieving it.

• Approach your goal as if you've already achieved it.  This will put you in the right mindset.
• Be specific.  The more specific your goal is the better.  Instead of saying, "I have lost weight" say, "I have lost 20 pounds and dropped two pants sizes."
• Divide it up.  Large goals are easier t reach if you break them into smaller pieces.  Divide your big goal into smaller short-term and mid-term goals.  If your goal is to run a marathon, a short-term goal would be to run a 5k within the next month, and a mid-term goal would be to run a half marathon by June.
• Give yourself a time limit.  Setting a deadline will help you maintain the focus and drive you need to  achieve your goal.
• Track your progress.  Tracking allows you to see how far you've come and may give you the extra motivation you need when you're feeling discouraged.

Reposted from:  2015 Buffini & Company 

New Year's Resolutions for 2014 Home Buyers in Rebounding Market

The New Year is always a time for Americans to vow to eat less and save more. After all, who doesn't want to be thinner and richer next year?

But a tradition of this column is to offer New Year's resolutions for home buyers and home sellers, plus a few New Year's financial resolutions that anyone could use to get their money in better shape.

First, the overview: As we look back over 2013, it's clear that the housing crisis has turned around. New monthly foreclosures are down to levels last seen in 2008, and new and existing home sales are stronger. Home prices surged midyear, and now those increases are moderating. It's plenty tough to get a mortgage -- and it might get a little tougher, now that the qualified residential mortgage rules are going into effect.

On the plus side, the Federal Reserve Bank continued to buy mortgage-backed securities and other securities to the tune of $85 billion per month during the year. Will that continue? That depends. While the labor participation rate is extremely low, the official rate of unemployment fell to 7 percent, the lowest in five years. Still, the true measure of unemployment says about 11 percent of eligible workers are unemployed. That hurts.

BELT-TIGHTENING

In truth, most families in America have tightened their belts further. For them, the recession hasn't ended. Purchasing power is lower and real income has hardly budged. For most Americans, this isn't a Christmas of plenty. Judging by our mail, plenty of homeowners are having trouble making their mortgage payments, even as delinquencies have fallen a bit from all-time highs.

There's still a brighter outlook for real estate now than at any time since 2007, even though new construction is stuck around 450,000 units per year, or about half of where it should be -- a depression by any stretch of the imagination.

Where does that leave buyers? The times aren't as good as they were a few years ago. Mortgage interest rates are at 4.5 percent for a 30-year fixed-rate loan, up 1 percent or so from last year. And prices are up as well. That means affordability is down.

EXPECT LOW RATES

As we said last year, mortgage interest rates will likely stay low through early 2015, or until the economy really starts taking off. Janet Yellen will likely (as of this writing) take over for Ben Bernanke in January, but she isn't expected to change much.

If you're hoping to buy a home to live in or to invest in during 2014, here are a few New Year's resolutions:

1. Understand your credit history and credit score. For better or worse, these will rule your financial life. You can get a free copy from each of the credit reporting bureaus once a year from AnnualCreditReport.com, but you'll still have to pay for your score (about $9). It's worth knowing what your score is before you apply for a loan.

2. Find the best loan, on the best terms. That means you'll have to do your homework. Despite the government securing or guaranteeing nearly all loans through Fannie Mae, Freddie Mac and FHA, banks are offering different terms. Talk to at least four or five lenders before making a decision.

3. Build the best home-buying team. Whether you're buying investment property or a home to live in, you'll want to create a team of real estate professionals who can help you find the right property, at the right price, on the best terms, without any headaches.

Think about including a great real estate agent, mortgage lender, real estate attorney, tax preparer (with experience in investment real estate if you plan on buying real estate as an investment), and real estate home inspector to start. Residential real estate investors will want to add a 1031 exchange professional and commercial (if appropriate) inspector to the mix.

Reposted from:  http://www.newsday.com/classifieds/real-estate/new-year-s-resolutions-for-2014-home-buyers-in-rebounding-market-1.6699491