Resolve to figure out your finances

This is the time of year most of us make resolutions for the coming year. For 2010, let us all resolve to get our financial houses in order.

While financial planning may seem overwhelming to many, especially those who have not attempted it in the past, the process of getting your finances in order is simple.

It does, however, require will power and determination to implement.

The first, and most important, thing to do is to set financial goals.

Make sure your goals are realistic, establish appropriate time frames, and be flexible. Always remember success occurs one step at a time. And setting goals is the initial step.

Your primary goal, for example, may be to save $10,000 during the year for a down payment on a new house.

Or it may be to set aside money for a college tuition fund for your children.

Once you have determined your important goals, develop a budget.

Budgets allow you to understand where your money goes, ensure that you do not spend more than you make, and help you find uses for your money that will increase your wealth.

A third step is to practice systematic saving. Your budget should include saving a percentage of your income.

Some of what you save is for unforeseen emergencies. The remainder should be invested.

A final part of your financial plan is to take control of debt. Debt is a tool to be used wisely. If not used judiciously, it can easily get out of hand.

With respect to debt, you should pay off credit card debt monthly.

If you borrow money, as most of us must do from time to time, learn everything you can about the loan, including interest rate, fees, and penalties for late, or early, payment.

This approach to taking control of your financial affairs is simple.

But despite its simplicity, it works. Resolve to give it a try in 2010.