Financial Goals Every Consumer Should Make

By FOXBusiness

The start of a new year provides a fresh chance to get your finances in order, create a budget and increase your savings.

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“A lot of people are thinking about the national deficit and unemployment,” says certified financial planner Dan Keady, director of financial planning at TIAA-CREF. “People need to take those concepts to a personal level and have a New Year’s resolution to take control.”

According to money experts, to make a financial resolution stick, you must create an actionable and realistic goal and then conduct a thorough personal finance assessment.

“To take an assessment, list on a piece of paper all you own and call it assets and then all you owe and call it liabilities,” says certified financial planner Karl Byrd, vice president of Security Ballew Wealth Management. “The difference between the two numbers is your net worth.”

Byrd advises conducting this evaluation every year to help identify any trends over time. For instance, if your savings is steadily increasing, that means your budgeting plan is working. However, if your debt level is creeping up, it’s time to readjust your spending habits.

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Once you have your assets and liabilities on paper, you can start plotting your financial goals. It’s important to stay realistic with your goals and schedule regular evaluations to see how the budget is working.

Keady recommends picking one or two financial areas you would like to improve, like building up your retirement or saving more for your children’s college, and make them the focus for the year. “If you pick five personal faults to work on at one time you are trying to apply a lot of effort to a lot of things which is very difficult,” says Keady. “Pick one or two things and monitor the month-to-month progress.”

Every person and family needs an emergency fund that will cover an unexpected curve ball without going into debt.

“Most middle-income families need about four to six months of after-tax income in savings,” says Byrd. That will give you a cushion if you lose your job or are hit with an unforeseen expense or illness, he says.

Keady recommends every one evaluate their retirement contributions in 2012 and see if they were adequate. If your savings isn’t on track, it’s time to reassess your game plan and commit to stocking away more money.

“People really need to look at their own perusal finances and see where they can cut costs and save money,” adds Chad Parks, CEO and founder of The Online 401(k), a retirement plan provider

Along the lines of managing your retirement savings more proactively is paying better attention to investments. While Byrd advises against focusing on the day-to-day gyrations of the stock market, he suggests everyone pledge to create a long-term investment plan and stay current on major changes in the macro and micro economy that could impact your portfolio.

According to Parks, investors should be taking into account that around 10,000 baby boomers turn 65 every day and what their shift into more conservative investment vehicles will do to the stock market.  “I think there’s going to be major pressure put on the stock market as people want to move away from the stock market and into fixed income, more stable investments,” he says. “When you have supply and demand and the demand starts to go down stock prices will go down.”

He also recommends people review their market exposure throughout the year as well examine what they are investing in and investments’ rate of return to know if they will meet their retirement goals.

Becoming debt free may seem like that unobtainable New Year’s resolution, but Byrd says if you exclude your mortgage and car loan, having zero debt is a goal anyone can achieve regardless of their income level. He suggests evaluating debt and creating a short and long-term plan to get rid of any debt and stick to it. “By eliminating debt it makes your retirement years a lot more doable,” says Byrd.