How to keep your New Year’s financial resolutions

ByJill Schlesinger /MoneyWatch/ December 28, 2012, 6:55 AM

(MoneyWatch) When you think about it, New Year’s financial resolutions may be easier to keep than losing weight or quitting that smoking habit. According to a study by Fidelity Investments, 62 percent of consumers say they stuck with their financial resolutions in the past year, compared with only 40 percent who kept their other resolutions.

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Make SMART New Year’s Resolutions

Everyone–regardless of age–can take steps to shape up their finances.

As you decide on your New Year’s resolutions, think SMART–financial goals that are specific, measurable, adjustable, realistic, and time-oriented.

Here are some examples of financial goals for different generations:

* Collect your change. Each time you buy something, save the change you get back. Deposit the change in a container at the end of every day. Over time it could add up to a significant amount of money.

* Save your allowance. Whether you want to buy something you’ve been eyeing for months or you want to start saving for college, the only way you are going to do it is by putting your allowance away. Deposit at least part of your allowance in a share savings account at the credit union.

Gen Y
* Open a Roth IRA (individual retirement account) and start saving. Make savings a habit and invest at least 10% of every paycheck for retirement. The longer you have to save with a Roth IRA, the more you save on taxes. Although contributions aren’t tax-deductible, your money grows tax-free and comes out tax-free as long as you meet certain requirements.

* Put your credit card away. Use credit cards only when you know you have the funds set aside to pay the bill in full when the bill comes. Don’t leave a balance on your credit card or you’ll be charged interest.

Baby boomers
* Put your debts in priority order. Make a list of all your liabilities and organize them by the annual interest rate. Pay off those with the highest rates first, while still making at least minimum payments on all the others. Set a specific, realistic date for when you plan to achieve your goal of paying off all debts.

* Determine your net worth. Calculate your assets minus liabilities each year–preferably on Dec. 31–so you quickly can see whether you’re gaining ground or falling behind. Your net worth should be increasing each year. If it’s not, make a plan to improve it, such as pay down a specific debt or put more money into a retirement account.

* Evaluate your estate plan. Establish or review your will, advance directives, and powers of attorney, and make sure they reflect your preferences and current situation. Make sure all of your intended beneficiaries are on file for all your financial accounts.

* Check all insurance policies. For example, know what is covered in your homeowners policy and verify your liability coverage. Call your insurance agent if you have any questions.

A credit union could be your best source for a mortgage

Great article from…

Financial institutions have pulled back on mortgage lending since the housing bubble burst, but credit unions have increased their mortgage lending substantially. According to, credit unions originated 60 percent more first mortgages during the first nine months of 2012 compared to the first nine months of 2011.

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Guidelines for Paperwork Storage

Many people struggle with knowing what paperwork to hang on to, how long to keep it, and what to shred. Follow these guidelines to help keep your files lean and organized.

Keep for less than one month
• Receipts for small purchases and ATM transactions—Keep until you reconcile against your checking account or credit card statements.

Keep short term (less than one year)
• Credit card, utility, cell phone, and other monthly statements until you’ve reviewed for accuracy.
• If you’ll need any of these bills for tax purposes (i.e., you write off part of your cell phone bill for a small business), keep them for tax documentation.
• Loan and mortgage statements—Get rid of monthly or quarterly statements when your end of year statements arrive.
• Copy of your driver’s license
• Comprehensive list of credit union and other financial institution account numbers; credit card account numbers (in case your wallet is stolen or for another emergency)
• Old insurance claims—If the claim has been paid.
• Social security statements—Shred last year’s when you receive a new one and have reviewed for accuracy.
• Pay stubs—Purge individual pay stubs once your annual W-2 form arrives and you’ve reviewed for accuracy.
• Vehicle paperwork—Keep for one year after you sell the vehicle.
• Receipts for major purchases (to use the warranty or prove value in the case of loss or damage or for items you may want to return).

Keep one year
• Hopewell Federal Credit Union checking or savings account statements. If you use Hopewell online, you might choose to not receive paper statements—account information is available 24/7 and statements are available monthly.
• Retirement plan statements: Keep quarterly statements of contributions and withdrawals for one year. Toss after matching figures with annual statement. Keep annual summaries until you retire.

Keep long term
• Tax documents to include proof of charitable contributions and tax-deductible medical expenses.
• Loan and mortgage annual statements
• Receipts and information relating to major home improvement
• If you buy or sell property, keep records of legal fees and your real estate agent’s commission for six years after you sell your house.
• Bills for major purchases

Keep indefinitely
• Birth, death, and marriage certificates
• Divorce, adoption, citizenship, military discharge, and veterans papers
• Social Security cards
• Wills and living wills
• Passports
• Diplomas
• Insurance beneficiaries
• Education records
• Immunization records
• Tax returns (1040)
• Tax forms related to retirement accounts
• Documents related to trusts or giving stock to beneficiaries
• Power of attorney
• Inheritance records
• Updated household inventory
• Proof of major debt repayment
• Legal correspondence
• Bankruptcy paperwork
• Retirement account documentation that shows contributions and withdrawals

Keep electronic data on an encrypted USB flash drive or encrypted external hard drive. You can cut down on a lot of paperwork by signing up for online statements and payments from Hopewell Federal. If you don’t have a safe deposit box, stop at Hopewell Federal Credit Union for details about this safe, affordable way to store your valuable documents.