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Financial Resolutions for the New Year
Laguna Niguel, CA
Tuesday, December 20, 2011
With the coming of the New Year, many of us follow the annual ritual of making resolutions for the New Year. However, whether it is to lose weight, quit smoking, exercise more, save more, etc., we soon lose our enthusiasm for improving our lives and revert to our old ways. If there is only one resolution that you should keep it is to improve your quaestrology, a holistic study of the financial issues affecting the individual. In order to successfully develop and pursue your financial resolution, the author has developed the following nine step program. 1. Decide to take control of your finances in order to achieve your family's financial objectives. 2. Define your financial objectives, i.e., what you need money for. Include what is needed in the next 30 days, 31 to 90 days, 91 to 180 days, 181 -365 days, 1 - 5 years, etc. 3. Determine the status of your finances. This involves preparing a Statement of Your Financial Condition, Income Statement and Quaestrological Summary. 4. Categorize your financial obligations into fixed, variable, and discretionary expenses. Fixed obligations are periodic payments such as mortgage and car payments that are constant over a fixed amount of time. Variable obligations are those whose cost varies with usage. Gasoline and utilities are examples of such obligations. Discretionary obligations are those such as entertainment and vacations that one incurs to indulge oneself. 5. Identify opportunities for improvement by examining sources of additional income and areas in which financial obligations can be reduced. Potential sources of additional income include getting a second job, having additional members of the family work, investing savings in income generating assets, etc. Savings opportunities are easiest to find in one's discretionary expenditures. This could mean indulging oneself less often or with lower cost alternatives, reducing variable expenditures by car pooling, taking one's lunch to work, etc. Deferring purchases such as those for a new car or buying less expensive alternatives are examples of ways of reducing one's fixed obligations. 6. Obtain commitment from other members of your family to your financial objectives and the opportunities to increase income and reduce expenses. 7. Document your objectives and each of the steps that you ha 8. On a monthly basis, review progress against the plan. This review should include not only the progress that has been made but also steps that might need to be modified, deleted or added to you plan, ve decided to take into a plan that shows the steps to be taken, responsibilities for completing each task, date the task should be completed, and what constitutes completion of the task. 9. On a quarterly basis, update your Statement of Your Financial Condition, Income Statement and Quaestrological Summary in order to measure the success of your financial New Year's resolution. For more detailed information on the concepts provided in this article, refer to Common Sense Prescriptions for Financial Health, Improving Your Quaestrology. About the Author Experienced as a registered representative, an individual investor and a management consultant to Fortune 500 companies, Doniger has developed his perspectives on the economy from a lifetime of smart investments. His books include A Common Sense Road Map to Uncommon Wealth, A Common Sense Approach to Successful Investing and Common Sense Prescriptions for Financial Health. He is also a regular guest on the Business Talk Radio Network and other radio shows. His articles have been published in media outlets such as Investor's Digest of Canada and Morningstar. For further information the author and his books go to BooksByDoniger.com Marvin H. Doniger
Doniger Associates
Laguna Niguel, CA
949-661-5456
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