Pinch Me Resolve to Keep Your Money in Check; Here Are Some Tipsfrom Experts on Being Financially Correct in the

New Years resolutions may look a little different for those hit hard by this recession. The tough economy, high unemployment, foreclosures and corporate cutbacks are expected to continue into this year. So what how can you start 2009 right?

Financial advisers say quite simply: Live within your means.

More than ever, youll need to take a hard look at your assets and debt and how youre going to handle each. Do you just want to make ends meet? Or meet goals?

“We want to encourage people not to overreact to this economic turmoil and to sell off all of their investments and go to cash,” said Patrick Doland, president of Reason Financial Advisors in Northbrook. “The average person just needs to ride this out and try to look for the rainbow at the end of this journey.”

And when will this rough journey end? Possibly in about six to nine more months, he said.

Whether youre at wits end or mulling your next investment, suburban financial advisers offer some tips.

First, create a budget and stick to it, said Jim King, a certified public accountant with Balasa Dinverno & Foltz LLC in Itasca.

“As part of your budget process, resolve to invest money on a regular basis,” King said. “Set up automatic electronic transfers from your paycheck to your investment accounts on a monthly basis.”

Do a financial inventory, said Mark LaSpisa, co-founder of Vermillion Financial Advisors in South Barrington. “This is a great time to take an inventory of how you finished the year and draw up a basic balance sheet of your net worth,” said LaSpisa. “List the assets and debt.”

Focus heavily on your credit cards and mortgage, said William Dever, a CPA and financial adviser with JMG Financal Group in Oak Brook.

“Try to pay off your credit cards in full each month. This, of course, will require that you are limiting your spending to what you are able to pay off,” said Dever.

“Try to make extra mortgage principal payments each month. Doing this on a regular basis could reduce the time it takes to pay this off, by years.”

Heres more advice from the experts. Perhaps theres room for a couple of financial resolutions in your own life.

* Reduce spending. Look through your budget to find where cuts can be made. These may include eating out less, brown bagging your lunch, combining trips to reduce the use of your car, engaging in more family time at home instead of paying for an activity elsewhere, or renting a movie instead of going to the theater.

* Maximize your 401(k) contributions. The 2009 allowable contributions go up again to $16,500 for all employees and another $5,500 for those who are age 50. Also, the markets could turn around this year. So your contributions could add even more to your wealth.

* Determine if youll need to do any major spending this year. If its elective, reconsider if you really need to do it this year. Do you really need to build an addition to your house now? Do you really need a new car now? Do you want to take that expensive vacation? Or should you just scale down?

* If you have loans, like a mortgage, review them. As interest rates drop, consider refinancing. If you haveoutstanding credit carddebt, decide which to pay off first.

* If you have kids heading to college, consider increasing by 10 percent your contribution to a college savings fund. Or re-evaluate what you can do.

* Look at your required minimum distributions if youre over age 70. Reset the distribution in 2009 so you know what your income is going to be.

* Buy a shredder and clean out old financial papers.

* Look up your credit report with one of the credit reporting agencies and check its accuracy.

* Make sure your portfolio is in order. With the recent market movements most portfolios are out of line with original targets. This likely will offer you the opportunity to buy low and sell high by bringing the poorer performing asset classes back up to target and selling down those that have held up or have had a positive return.

* Set up automatic electronic transfers from your paycheck to your investment account on a monthlybasis.

* Everyone should have a 6-month to 12-month emergency reserve of cash. Once you have an emergency fund, become a disciplined long- term investor. Long-term investors have to realize that it is always a good time to be an investor and especially after a 40 percent decline in the equity markets.

* Review your tax return as many individuals have experienced significant capital gain distributions in their mutual funds despite having negative returns in 2008.

* Avoid sacrificing the chance to make family memories. If you cannot afford a family vacation, make sure you spend time together and do special things that are free or cost little.

* Teach others, especially children, the value of getting a good education, holding onto a good job and learning how to save money for a rainy day … or a recession.

(c) 2009 Daily Herald; Arlington Heights, Ill.. Provided by ProQuest LLC. All rights Reserved.