How to Get Financially Fit in the New Year

The Wall Street Journal tells how to get financially fit in the new year, listing the following month-by-month plan:

• JANUARY: Max those savings!
• FEBRUARY: Target your cash flow.
• MARCH: Live without plastic for a month.
• APRIL: Spring clean your investments.
• MAY: Zap the debt.
• JUNE: Invest in yourself.
• JULY: Check your progress on the cash flow.
• AUGUST: Convert your traditional individual retirement accounts to a Roth IRA.
• SEPTEMBER: Negotiate a Christmas truce with all the adults you know.
• OCTOBER: Tackle your insurance.
• NOVEMBER: Update your will.
• DECEMBER: Open 529 plans for your children and grandchildren.

Here's my take on these:

• Max those savings! -- Of course!!!! "Save more" is my middle name. ;-)
• Target your cash flow -- Yes, make your gap as large as possible. I think I may have gotten sloppy in my spending over the past few years and I believe that there's a few extra thousand dollars there if I rein it in a bit -- which I intend to do.
• Live without plastic for a month -- Why? I pay off my cards every month and end up making several hundred dollars a year by using them.
• Spring clean your investments -- At the end of last year, I closed several small accounts simply to make record-keeping easier. I need to consolidate a couple others this year.
• Zap the debt -- We don't have any debt.
• Invest in yourself -- I need to do this. For most of us, our careers are our #1 financial assets. If we can do things to grow its value by a few extra percent every year, that's a HUGE payoff over time. 
• Check your progress on the cash flow -- Make sure the gap is still as large as possible.
• Convert your traditional individual retirement accounts to a Roth IRA -- I've contemplated this move, but there are so many unknowns that it's not clear whether or not doing this is a good financial move. As such, I'm holding off on this personally.
• Negotiate a Christmas truce with all the adults you know -- I'm wondering if there's a way to make 2011's Christmas more about the spirit of Christmas and less about getting gifts. Not easy to do in our society and with kids.
• Tackle your insurance -- Having a regular time to review insurance coverage, costs, etc. is a very good idea.
• Update your will -- I haven't done this for awhile, but not much has changed since we last had it done. And with the estate tax being kept at a pretty high level by the recent tax legislation, there's really no reason to make a change at this point.
• Open 529 plans for your children and grandchildren -- Already done for our kids. We do need to contribute to them in 2011 though -- and we'll do so well before December.

Do any of these ring especially true for you? Which ones and why?

Comments

[Robert Muir]

I had a couple of smaller traditional IRA accounts and I took advantage of the new rules to consolidate them with my Roth. Yes, it was painful paying the increased quarterly taxes (I'm not spreading it out over 2011-12), but it's nice having the convenience of having the money consolidated and it was VERY nice getting those tax free gains from the market run later in the year!