Updated: May 3, 2013 12:14PM
New Year's resolutions are always about doing things, or not doing things. Things like exercising, quitting smoking or otherwise changing your basic daily habits to reach a particular goal. That's why resolutions are so quickly abandoned: They require change.
But how about resolving to know things this year? After all, since you were little you looked under the bed and in the closet to make sure the bogeyman wasn't waiting to pounce when the lights went out. Back then you wanted to know, wanted certainty. And there was a warm feeling when you realized there were no dangers lurking.
What are you afraid of knowing now? Maybe your resolution this New Year should be to check out those lurking worries, especially the financial ones.
Know how much you owe
Let's start with a simple one, but a huge stumbling block for many people worried about their finances. How much do you owe? Can you resolve to pile up the credit card bills that will soon start arriving? Then open them all at once, and simply make a list of the outstanding balances, the minimum monthly payments, and the interest rates.
And now you'll know. I'm not going to preach about what you should do. You're smart enough to figure that out. But if you're overwhelmed by those totals you can get help from Consumer Credit Counseling Services at (800) 388-2227.
Know where your money goes
You don't really want to know that either, do you? What are you worried about? Making the same mistakes this year? Here's how to know where you're spending every penny.
Buy the 2006 version of Quicken or Microsoft Money, and just pop the disc into your computer. I assume you're already paying your bills online, but if you aren't, go to your bank's Web site and sign up. Then regularly download your bill-pay information into the money management software. You can assign each payment a category. Future downloads of checks to the same payee will be sorted automatically.
You can even categorize the spending you do on your credit card when you download the bill payment. And if you use your debit card instead of cash wherever possible -- dry cleaners, gas station, etc. -- those debits will be downloaded as well.
Then you can give all your spending a category. Now, peek under the bed: With a click of your mouse, all your spending is displayed by category in a pie-shaped chart or bar chart. Now you know where all the money went.
Know your 40l(k)
You don't actually have to change your investment choices, but wouldn't it be nice to know if you're doing the right things with the money you set aside? Don't bother asking the person sitting at the desk next to you. He or she doesn't know either. And, after all, each person is different, with different goals and dreams.
So how do you know about what choices you should make?
If your company offers a service called Financial Engines, you have the answers at your fingertips. You fill in some basic personal information, and the company loads in your current investment status.
Then the tool creates a personalized Monte Carlo modeling scenario of how you should best structure your investments within the plan to meet your retirement goals. (If your company doesn't offer this service, go to www.TerrySavage.com and click on the FinancialEngines blue icon on the home page for a free one-year trial.)
Know when you can retire
This is the biggest bogeyman of all.
No one thinks you can possibly know the answer, much less save and invest enough to reach that goal. So we huddle under the bedsheets, afraid even to peek into the darkness.
But there's a very easy way to know how much you need to retire, and how much you should save every month. Just go to www.ChooseToSave.org, where there's a handy calculator called the "Ballpark Estimator" that will do the work for you.
The Employee Benefit Research Institute has created a personal, in-depth process to help you know where you stand and what you might want to do to make your dreams come true.
Don't feel compelled to take action. Just resolve to peek into the darkness under your personal financial bed.
Just one final thing: You have to want to know. That's the first step to change. And that's The Savage Truth.
Terry Savage is a registered investment adviser. Distributed by Creators Syndicate.