Local financial advisors give advice on saving green in the new year

   After reviewing the past several years of broken New Year's resolutions — exercise more, eat better, stop smoking — you've decided that you're not going to tempt fate by trying them again in 2009.
    Still, you want to set some kind of self-improvement goal for the upcoming year. So how about taking steps to put yourself on a more secure financial footing?
    Improving your financial standing is a worthwhile goal at any time, but especially in today's turbulent economic climate.
    "When things feel good, people tend to overspend and overindulge and get bogged down with too much debt," said Melanie Harshberger, a financial advisor with the Edward Jones investment firm in Dodge City. "The situation now, as it is, has been very trying for people because it's been so broad-based.
    "You had stocks down, bonds down, real estate down. Commodities are down. And so people are feeling a squeeze that's been a little tighter than we've seen in the past. Here are five financial resolutions for 2009, as recommended by several area personal finance experts:
    • Sit down and take a hard look at your situation. Figure out your income and monthly living expenses, and make sure you're making at least minimum payments on all your debt obligations — credit cards, car payments and house payments.
    The resulting number should be positive, signifying positive cash flow, said Jeff Witherspoon, executive director of the nonprofit Consumer Credit Counseling Service in Wichita. If it isn't, look at various angles for attacking the problem.
    "I always tell people 'Two and two has to equal four,'" Witherspoon said. "You either have to raise income, reduce expenses or sell anything with a payment, because you can't borrow yourself out of debt."
    For example, he said, people could get a part-time job to supplement their income or cut costs by dining out less often.
    • Get out of credit card debt. If you have several cards, start paying them off one at a time and pay more than the minimum amount.
    Take the amount that you can pay over the minimum and apply it to the card with the highest interest rate, said Kent Smoll, Dodge City Mayor and a certified public accountant and personal financial specialist with the Dodge City accounting firm Smoll and Banning.
    Repeat the process with each credit card, then don't use it again once it's paid off.
    "I know it's hard, but you've got to do that," Smoll said.
    He said people should avoid using credit cards unless they can pay off the balance at the end of the month.
    • Put at least $3,000 into a special fund for emergency use only, such as car repairs or unexpected medical expenses. Don't touch that money until an emergency arises.
    "You, me, everybody has things in their life that are going to happen to them financially," Witherspoon said. "And if they're not prepared for it, then they're back in the same boat because if they don't have the money to pay for whatever it is — like a car repair or a medical situation — then they're having to put it on credit cards."
    He said these days, more of his service's clients are reporting that they used credit cards to cover emergency medical expenses.
    • Don't panic, because the market will bounce back eventually.
    Smoll said consumers who have bought only one stock may not want to stick with it if it's not performing well. But he said consumers who have a fully diversified portfolio with a wide range of investments shouldn't tinker with it, even in a volatile market.
    "If you'll just leave it alone, it'll eventually come back," he said.
    • Get in the habit of saving for retirement. Continue contributing to an employer-sponsored retirement plan if the company matches your contributions, or consider investing in either a traditional Individual Retirement Account or a Roth IRA.
    Harshberger said she encourages her clients with retirement plans to set up corresponding accounts like a Roth IRA, which allows them to start an automatic investment that comes out of their checking account each month.
    "That's an ideal situation, because they don't have to think about it," she said. "And it forces them to get into that habit of saving."
   
    Reach Eric Swanson at (620) 408-9917 or e-mail him at eric.swanson@dodgeglobe.com.