Every New Year’s Day you are confronted with three important financial choices:  (1) dedicating yourself to making well planned financial decisions that will move you closer to financial success, (2) changing nothing and thereby maintaining your present course, or (3) losing focus and risking falling behind.  Make no mistake – these are choices!  Choices you make either intentionally or by default – either way you and your family will live well into the future with the choices you make this New Year’s Day.

So – Go For It!!!  Give yourself and your family a real shot at financial success.  Dedicate yourself to making well planned financial decisions that will move you closer to your financial dreams.

There are five steps you can take in 2012 to help you make sound financial decisions.  Let’s look at each.

First, choose to be frugal with money.  Don’t let the money flow in on payday and then flow out of your pocket without regard for where it is flowing.  Establish long term and short term goals and then budget your money to reach those goals.  By having a budget you plan the spending of your money – down to the dollar.  Less money is wasted and more goes toward what you really want.  You can find a basic budget online at many websites.  Some are better than others – the important thing is that you USE IT CONSISTANTLY!

Secondly, choose to save and have a purpose for each savings account.  To do this you will have to educate yourself about basic money management principles.  In other words, do you really know how money works?  Do you know the Rule of 72 or how to Dollar Cost Average?  Do you know which investments are appropriate given the risk tolerance and time horizon for a particular account?  Step up your game – learn about money and how to make it work for you rather than you working for it.

Thirdly, choose to manage your retirement with wisdom beyond your years!  There is a reason we wish we could go back to our youth with the wisdom of our current age.  Instead of having to live with regret, start now managing your 401(k) with an understanding of where you want to be at retirement age.  Learn how to put the pieces of your retirement plan together in a way that gives you the best chance of success toward meeting your retirement goals.

Fourthly, for the sake of your family and those dependent upon you, choose to be careful to cover your risks.  Make sure that your family is financially secure if something should happen to you.  Take the steps necessary with respect to life insurance, property and casualty insurance, long term care insurance etc.  Not addressing these issues can wipe out a lifetime of savings in a heartbeat.  The result of choosing not to do anything about risk is often devastating.

Finally, choose to be vigilant about your debt this year.  In fact, set as a goal in 2012 your freedom from debt obligations.  Think of debt as a cancer that is slowly eating away at your financial future.  At some point it becomes a stage four cancer – and there may be no way to recover.   If that happens, you will be dependent on either your family or the government – or maybe both – in retirement.  Not a pretty picture.  Design your budget to eliminate as much debt as possible.  When you stop paying interest it will result in more money in your pocket – or better yet – more in your savings accounts.

These five choices are easy to articulate but take commitment to implement.  So maybe there should be a sixth choice – choose to stay committed to financial success.  The choice is yours.  Financial success in 2012 is yours for the taking.  Choose to take it!!

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