By Kirsten Denker

How to Manage Your Money in the New Year


family finances, managing money

   Many of us start the New Year with a resolution to get in shape. This year, how about making a resolution that doesn't involve becoming sweaty at the gym or going without chocolate? Why not make 2010 the year to get your finances in great shape?

   With the continuing uncertainty in the economy, this is the perfect time to stop and take stock of your family's finances and work out a plan for 2010. What are your goals, and how are you going to reach them?


 Here are some tips for the year ahead:

  • If you've never done it before, draw up a family budget. You can do this with a simple pencil and notebook, or go online and access free worksheets that make budgeting as easy as entering numbers in a box. List every expense you can think of - from major bills and grocery expenditures to the newspaper you grab from the newsstand on the way to work. Online resources can be very helpful - try the worksheets at:,, or
  • Once you see all your expenses in black and white, it is much easier to decide what outlays are worthwhile and which ones could be cut. For instance, if you realize that stopping in at the 99 cent store to let your preschooler choose a treat on Friday afternoons is costing you $250 a year, you may decide to go straight to the playground instead. Or you may feel it's worth it to see her face light up - either way, you're making an enlightened choice.
  • When you've subtracted all your expenses from your income you'll know what extra money is available and can decide what to do with it - pay down debts, contribute to savings, or to spend on a luxury like a vacation.
  • Why wait till April 15th to file your taxes? According to the IRS, 77 percent of taxpayers get a refund, and the average amount of the check is $2,100. If you belong to that majority, file now and think hard about how you are going to use that refund. If you have outstanding loans and bills, use it to pay them down, starting with the ones that charge the highest interest rates on unpaid balances. Or use the money to start or contribute to an existing savings account, retirement fund, or college savings plan. If your family has no emergency fund, this is a good opportunity to set one up.
  • When people are asked in polls how they intend to spend their tax refund checks, most say they will follow the advice above. In fact, in 2009, 20 percent more people said they'd use their refund money to pay off bills than the year before. However, 38 percent were still planning to spend their checks on purchases - and clearly a lot of people head straight to the stores. Figure out what your priorities are before the check arrives and stick to your decision.


 Michael Morrison is a financial planner with the company Strategies for Wealth. He advises families to "build a financial plan on a foundation based on certainty and guarantees."

 Morrison recommends using programs like Quicken as resources for keeping track of your finances. His company has developed a product called The Living Balance Sheet that allows clients to access all their financial data online. "Having their own customized website gives them the ability to really see the interdependence of every financial decision," Morrison says.

 Morrison's advice for the coming year? "Protect yourself and your assets by shifting risk, tomorrow and forever. We must take back stewardship of our finances. And although we can't control the markets, inflation, or taxes, we do have the ability to be organized, protected, and efficient."

 For more advice on tackling debt, go to or call the National Foundation for Credit Counseling at (800) 388-2227.


Kirsten Denker is a freelance writer and mother of two.

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