That's tougher to do than to talk about because real improvement usually means changing your spending habits or conquering your natural inclination to put off dealing with difficult tasks.
However, if you can take on just one or two of the following, you can improve your financial well-being:
Pay off credit-card debt. This always gets mentioned first because carrying high-interest debt while trying to improve your finances is like trying to climb a mountain with a heavy weight in each hand. A simple strategy: Stop using your cards, pay more than the minimum each month and do not reduce your payments as the amount you owe goes down. Make the biggest payments you can, focusing on eliminating small balances, then on paying off the highest-interest accounts.
Build an emergency fund. Your goal should be a cushion of three to six months' living expenses, which can be a life saver if you lose your job or face some other financial catastrophe. Keep the money in an easily accessible place such as a money market fund or a bank or credit union savings account.
Plan for future expenses. If your outgo exceeds your income, put yourself on a budget. Your plan should include infrequent expenses such as insurance premiums, vacations and car repairs. You also should be setting aside money toward big-ticket items such as a college education or a down payment on a house or car.
Organize your records. Set up a filing system for bank, brokerage and retirement plan statements, receipts you'll need for your tax return and important legal documents. When you need something, you'll be able to find it.
Review your will or get one for the first time. Make sure this important document reflects your wishes, including any charitable intentions you have. Appoint a guardian for any minor children.
Get an insurance checkup. If you have dependents, you need adequate life insurance. Review other policies, from health and disability insurance to homeowners and auto insurance. Take time to comparison shop before your next policy renewal.
Find out where your money is invested. Review the asset allocation in your retirement savings and other investment accounts. Is this a good plan for meeting your goals? If not, make changes.
Ramp up your retirement savings. Odds are that you are not contributing as much as you could to your 401(k) or other retirement plan at work. Take advantage of the opportunity to set aside money before taxes.
Don't get discouraged if you fall short in most or even all of these areas. Instead, focus on one or two areas where you can make a real improvement in the months ahead.
Q. How can I check out a local financial adviser to make sure he's on the up and up?
Start by calling the Florida Division of Securities toll-free at 1-800-848-3792. You also may find information online at www.nasdr.com click on "check broker adviser info", www.cfp.net (click on "search for a certified financial planner") or www.sec.gov (click on "check out brokers or advisers").
Steer clear of advisers who use high-pressure techniques or sell questionable products such as high-yield corporate notes or viatical settlements. Be wary of those who push annuities as the answer to everyone's investment needs.
Check references if possible. Satisfaction with customer service and advice are good signs. Enthusiastic claims of high returns may mean you've stumbled onto a scam.
Q. How can I find out if I am eligible for any of the money that brokerage firms are going to be refunding customers who were overcharged for mutual fund commissions?
The refunds are based on purchases of "A" shares of mutual funds (those with an upfront sales charge) since the beginning of 1999. If you bought A shares during that time period, call the brokerage firm that sold them to you to discuss your eligibility for a refund.
The overcharges resulted from a failure to apply volume discounts for customers who made large purchases. You are especially likely to be due compensation if you made multiple purchases. Often multiple purchases can be added together to become eligible for a discount, but many brokerage firms failed to do this consistently.
- Helen Huntley writes about investing and markets for the Times. If you have a question about investments or personal finance, send it to On Money. We'll try to answer those we think are of greatest reader interest. All questions must be submitted in writing, but readers' names will not be published. Send questions to Helen Huntley, Times, P.O. Box 1121, St. Petersburg, FL 33731.
