Three Resolutions You Can Actually Keep

Posted at 8:06 PM, Jan. 10, 2007

How are you doing so far with those resolutions you made a couple weeks ago?  You know, the ones about getting in shape and eating right and all the others we make every year. 

If it's not going so well, you're not alone. But there's no need to feel bad about it – simply replace those unattainable resolutions with a few that you really can accomplish.  Forget about giving up a favorite food. Think instead of these three resolutions that will help protect what you have and build for the future.

1.  Manage your mortgage. If you have an adjustable rate mortgage, look into converting it to a fixed rate.  30-year mortgage rates are still relatively low, and that ARM could soon start eating you up – if it hasn't already.  Even if you do have a fixed rate mortgage, if it's more than a few years old, look into whether you could save by refinancing at a lower rate.

2.  Improve your home and your tax bill.  If you're thinking about doing some home improvements, consider taking a home equity loan to cover the costs rather than financing them through a credit card or other loan.  Interest on this kind of loan can be deductible just as is mortgage interest when the funds are used for home improvements. Depending on the type of improvement, you may be able to recover most of the cost through the increased value of your home when you sell it someday. 

3. Keep Uncle Sam out of your pocket.  Do you usually get a tax refund because you pay in too much over the year, either through payroll deduction or by estimate payments?  Stop it!  Sure, that refund feels like found money, but all you've really found is money that you might as well have buried in the back yard.  Uncle Sam had your money for months and paid no interest – zip.  Work with your tax professional to adjust your withholding or estimated payments so you come out as close as possible to what you owe each year. The trick then is to not spend the extra you take home, but instead increase your savings either through an IRA, a 401(k) or similar plan, or a well-managed investment plan.

For all of these you'll want to have some expert advice from your tax and financial adviser.  Always consult your professional before making a decision about changing your mortgage, taking a home equity loan, or changing your withholding and/or estimated tax deposits.  It will be time well spent and give you peace of mind. 

And as for those other resolutions?  Well, there's always next year!