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Tips for Getting Your Financial House in Order in 2012

By Philip Cioppa

Every year brings the same thing: Resolutions that were made to be broken! Yet in today’s economic climate, we can no longer afford to break our financial resolves. More than ever, we need to be proactive and move our household to a higher and safer playing field. So what can we do? Here are 7 easy ways to make 2012 a true stepping stone on the path to financial independence and to help you secure a brighter future.

1. Commit to maxing out your 401(K) or any other retirement plan your employer may offer in 2012. If you do not have an employer-sponsored plan, open up and max out your contributions to an IRA. Even if you can’t max out—be consistent—put something in this important bucket.

2. If you have equity available in your home, re-finance now! Economists predict we will never have these low rates again. See your banker or mortgage broker today.

3. Put cash in the bank! I know the interest rates are bad compared to historical rates, but 0.15% is better than 0%. It also provides for liquidity of assets in case of an emergency.

4. If you have an investment portfolio, meet with your financial advisor now, not when you “get around to it.” If you do not have a financial advisor, hire one. Interview, ask the right questions and get referrals from friends and neighbors. No matter what your net worth, EVERYONE DESERVES a financial advisor.

5. If you have children, open up and contribute to your child’s 529 education fund. If you already have an established plan, contribute regularly. Again, it is not how much that counts, but how often. Utilize your state’s 529 sponsored-plan to gain tax benefits on your state income taxes, where applicable.

6. Gather your tax information together now and file as soon as possible, especially if you are to receive a refund. No offense against your local franchised tax preparer, however, always look for a seasoned professional, preferably a CPA. Remember, you get what you pay for.

7. Review your insurance needs—property and casualty, life, health, disability and long-term care. Acquire what you need, and do not hesitate to pay premiums for insurance policies, otherwise # 1-6 can fall down and wreak havoc on your financial health. Mitigate your risk and you will never regret it!

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