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Certification Updates

Already Dumped Your Resolutions? It's Time for New Year “Re-solutions”

Jan 12, 2011

CFP Board Presents Financial Planning Tips for Keeping 2011 Money Resolutions

Washington, DC, January 12, 2011 – Every New Year, millions of Americans resolve to improve their lives. Unfortunately, many of these New Year’s resolutions will fall by the wayside and by mid-month, they will have been forgotten. For those vowing to get their finances in order, Eleanor Blayney, CFP®, Consumer Advocate for Certified Financial Planner Board of Standards, Inc., has a solution for making sure financial to-do lists get done in 2011: start over and keep it simple.

“The key to keeping financial New Year’s resolutions is to apply the principle of ‘little and often,’” said Blayney. “Grandiose goals need to be whittled down into goals with specific, actionable steps, and there must be a commitment to updating these new goals frequently.”

According to Blayney, the usual financial resolutions can be given new life as smaller, and more attainable “Re-Solutions” for 2011. For example:

  • Live within your means: Turn this goal into a reachable action by committing to avoid all overdraft and late fees in 2011. Keeping monthly tabs on current account balances and credit card payment dates is an easy, simple way to avoid these fees.
  • Get out of debt: Breaking this goal into baby-steps can change this resolution into a big financial stride forward. Start by paying off more than required on credit cards, auto loans and mortgage – even if it is only a few dollars. Use auto-pay systems to make regular extra payments, and increase the amount of the payments at regular intervals. Once the auto-transfers are set up, the goal will begin to take care of itself.
  • Save more: Here is another resolution that is best accomplished a bit at a time. For working Americans, there is no excuse for not having money to save this year, thanks to a recent tax change. Starting with the first paychecks in 2011, the amount of employee contribution to Social Security will go down by two percent, giving most individuals a slight increase in their take-home pay (at $50,000 gross wages paid every two weeks, it will amount to about $38 per paycheck). Have this money automatically put into a money market account. After a year the account will have accumulated around $1000, which can be invested or used as an emergency fund.
  • Prepare a will: This is a perennial “must do” for many New Year’s resolvers, but one that is rarely kept. There seem to be so many “what ifs” that people often feel overwhelmed. By applying the “little and often” rule, this important task can be broken down and completed. First, understand that estate planning is a not a one-time event, but a lifelong process. Wills, trusts and beneficiary designations will need to be reviewed and adjusted to changing life circumstances every few years. Second, when creating an estate plan, forget about the “what ifs,” and keep the focus narrow. The only question that needs to be answered is: “If I died today, how should my affairs be handled?” By making an appointment with a CERTIFIED FINANCIAL PLANNER™ professional or other estate planning professional, individuals can take the first step in this ongoing process and get a handle on this difficult resolution.

“Financial resolutions are meant to be kept, and not necessarily checked off and discarded,” Blayney said. “If people see them as guiding principles rather than discrete accomplishments, they become more than a one-off goal, but a prudent way of life. And that is something we all should resolve to do.”

ABOUT CFP BOARD: The mission of Certified Financial Planner Board of Standards, Inc. is to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for personal financial planning. The Board of Directors, in furthering CFP Board's mission, acts on behalf of the public, CFP® certificants and other stakeholders. CFP Board owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements. CFP Board currently authorizes more than 62,000 individuals to use these marks in the United States.

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CONTACT:
Dan Drummond, Director of Public Relations
P: 202-379-2252
M: 202-550-4372
E: ddrummond@CFPBoard.org
Twitter: @CFPBoardmedia

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