Improving your financial status in 2013

This article was originally published on Monday, 07 January 2013 as the Money Matters article in the Guam Pacific Daily News (PDN).  Click here to subscribe to the PDN.

Question: This year I plan on improving my financial status. Do you have any tips on how to achieve this goal?

Answer: First, happy New Year and thank you for reading Money Matters.

This is a great question, especially for this time of year.

With the year just starting off, many of us make resolutions to exercise, to lose weight or to quit smoking. Making a new year’s financial resolution is just as important.

In these uncertain financial times with fiscal cliffs all around us, we must decide what we can control versus what we cannot.

You can control how much you save and how you allocate where your money goes. You can’t control what the markets and economy may do in 2013. Being prepared for those unexpected times is imperative.

Get a financial plan in place and decide how you want your money to work for you. What are your short- and long-term goals? How much do you need to get there?

How will you go about achieving those goals? If you don’t know where you’re headed with a sound strategy in place, it’s less likely you will arrive at your financial destination.

Here are three tips that can help you achieve your financial goals:

Set achievable goals. Set goals you know are attainable. Making a goal that is unreasonable will only discourage you. Think about what you really want to achieve, what steps you will need to achieve these goals, and what they will cost you. Write these goals down and hold yourself accountable.

Plan your estate. Many of us procrastinate on this because we do not like to think of the worst.

Making sure your loved ones who are dependent on you are well taken care of should be a priority.

Think about an advanced health care directive, a will and/or a living trust, a durable power of attorney, and an in loco parentis. Depending on your situation, you may not need all these. You can purchase software or get templates online.

I suggest you have an estate planning attorney look over your documents, especially if your situation is complex.

Examine your credit. This is the best time to check your credit.

For the past month or so you have been using your credit card(s) to spread the holiday spirit.

Take a good look at your credit card statement for any false purchases and let your bank know immediately if you see anything suspicious.

The start of the year also is one of the best times to check your credit score.

You can receive a free credit report at www.annualcreditreport.com.

This website allows you to request a free credit report once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion.

You may get all three reports at once or spread them out over a four-month period.

I recommend getting a report from each of the three companies mentioned above in four-month increments. That way, you’ll be monitoring your credit throughout the year and not just once a year.

Carefully look at your report for any odd postings and try to get them fixed as soon as possible.

You also can use sites such as quizzle.com and creditkarma.com to see your score for free and learn more ways to improve it.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com. To read past columns visit the Money Matters blog at https://moneymattersguam.wordpress.com.

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