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Guidance on Financial Resolutions

People usually include financial New Year's resolutions among those they make, but that may be even more true as 2009 turns to 2010, with a still-uncertain economy and high unemployment and home foreclosure rates continuing to weigh heavily on everyone's minds.

Send Us Your Questions!

So, for the latest edition of "The Early Show"'s "Ask It Early," financial contributor Vera Gibbons picked questions from viewers that many of us also have.

QUESTION 1, from Brennan, of Brooklyn, N.Y.: There are a lot of things I want to do in 2010 -- reduce my credit card debt; pay down my mortgage, rebalance my investment portfolio, invest and save more, make a living will, and give to charity. How am I going to do all of this, and should I hire a financial planner to help?"

ANSWER:

This is a New Year, so it's a good time to take stock and review everything. Brennan has goals that he has mapped out. That is a good first step. And, regardless of the fact that I think he has TOO MANY GOALS (make too many resolutions and you might just get frustrated with all you have to do; it's often best to start with one or two goals), he needs a PLAN in order to implement those goals effectively.

That means coming up with a budget, in which you are allocating money every month for your goals and trimming expenses that might keep you from reaching them. There are budgeting tools available online, from sites such as Mint.com, where you can build your own monthly budget tracker. If you don't want to budget everything yourself, a financial planner is definitely an option. You will want a fee-only financial planner, NOT one who is COMMISSION-based. This is important, because the financial planner only has unbiased advice if he has no stake in what you do with your money. A fee-based financial planner will insure that. To find a good financial planner who is fee-based, go to napfa.org. This is the National Association of Personal Financial Advisers.

QUESTION 2, from Gwen, of Los Angeles: "My resolution this year is to take some time off from work and enjoy life more! I work all the time! I always get in early, I leave late. I never use all my vacation time, and it leaves me feeling stressed out. So the question is, dare I take some time off for myself when the job market is so bad? And if I do, will I have a job to come back to?"

ANSWER:

You're not alone! These days, 51 million Americans aren't taking the vacation time they're entitled to! One-in-five have either cancelled or postponed their vacations because of work. We have too much to do, we're overwhelmed, and about half of us are too worried about our jobs and keeping them to take vacation. But everyone needs a break. Without it, you're going to be more stressed out, less efficient and less productive.

Granted, this isn't the time to take two-to-three weeks off. Your boss may get along fine without you, but then where would you be? Your boss may decide he doesn't need you. But try taking chunks of days off instead, such as long weekends, with plenty of advanced notice.

As for job security in 2010, that's not guaranteed anywhere these days. There are only a few growth areas hiring at the moment, such as health care and education. But if you're making money for your company or saving it money, you're less susceptible to getting cut. And the pace of layoffs has actually been slowing. According to The New York Times, "The Labor Department said the number of new jobless claims fell to 452,000 last week, down 28,000 from the previous week, on a seasonall- adjusted basis. That was a better performance than the decline to 470,000 that economists had expected. The four-week average for claims fell to 465,250, the 16th straight decline." That doesn't mean, as previously stated, that your job is safe. Take time off, but be weary of the job market. 2010 is probably going to be better, but not necessarily stable.

QUESTION 3, from Joe, of Pomona, N.Y.: "One of my goals in 2010 is to sell my house. Is it going to be impossible and should I wait?"

ANSWER:

The housing market is NOT going to improve until there is real job growth, and we are not going to be seeing this any time soon. It IS a good time to buy a house. The values of home are down to 2003 levels, and fixed rates are near record lows. The home-byers' tax credit has been extended, and bargain hunters are getting in on foreclosures all over the country.

As for selling your home this year, it's going to be challenging. Not IMPOSSIBLE, but it has to be really priced to sell, which means you will have know what comparable homes are going for in the area. You need to research your local market: What are comparable homes going for and how long are they sittng on the market? And then, keeping your pride in check if you can, price your home appropriately. Studies show that, if a home is priced appropriately, it will sell more quickly and at a better price than if it's priced too aggressively. If you price it too aggressively, no one will look at it and a sale will be impossible. To check to see how to price your home competitively, you can check out Zillow.com or Trulia.com.

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