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Resolutions need ‘reality check’

By Marcie Geffner · Bankrate.com
Tuesday, January 8, 2013
Posted: 12 pm ET

New Year's resolutions to pay off debt, save and invest money, further your education, or begin an exercise program might sound impressive. But sometimes, even these most-traditional commitments can backfire if they're not appropriate for your situation.

That's according to Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling, or NFCC, the largest and longest-serving national nonprofit credit counseling organization in the U.S.

"There's a right way and wrong way to do most things, and New Year's resolutions are no exception. A reality check that includes being honest about your limitations is key to identifying proper goals and meeting objectives," Cunningham said in a statement.

Here, courtesy of the NFCC, are some tips to help you figure out whether these goals make sense for you:

  • Pay off debt. Paying more to your creditors might not be the best use of your money if it forces you to compromise other obligations. Keep your home life stable by ensuring your rent or mortgage is current, utilities are on, food pantry is stocked, car's gas tank isn't empty and necessary medicines are purchased. When money is tight, paying debts in the proper order can prevent a bad financial situation from becoming worse.
  • Start investing. Everyone needs to plan for retirement, but playing high-risk games with your investments can be dangerous to your financial well-being. One effective way to build retirement security is to invest through monthly contributions to a retirement plan through your employer.
  • Begin an exercise program. Regardless of how determined you might be to exercise, a long-term contract at a gym or exercise club could be wasted money if you don't follow through. Likewise, costly home exercise equipment could end up being resold at a loss. To test your staying power, start with free or inexpensive options like taking your dog for brisk walks, climbing stairs instead of riding elevators and parking farther away from your front door.
  • Improve your skills. Student loan debt has a stronghold on many young adults who assumed a good education would help them get a job that would provide enough income to repay those loans. As an alternative, explore grants, which don't have to repaid, and consider free job retraining offered by skill centers. Additional continuing education also might be a cost-effective way to improve your skills and impress a current or prospective employer.

Are any of these resolutions on your radar?

Follow me on Twitter: @marciegeff.

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