Resolve to Improve Your Financial Well-Being in 1999

And what to focus on.
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At the beginning of each year, people always vow to quit smoking or hit the gym.

But what about your financial well-being?

I asked several financial advisers -- and a few members of the

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staff -- to help me construct a list of financial resolutions for the New Year. Some are personal and some are general, but all should help produce a healthier financial you by the end of 1999.

Don't Forget That IRA

You may hear this reminder every year, but it's certainly worth repeating: Open an IRA or contribute to the one you have.

Ron Roge of

R.W. Roge & Co.

is telling clients who have 401(k)s without matching contributions to put their first $2,000 into the Roth IRA and then contribute to their 401(k)s. In a Roth, you get greater flexibility and greater control than in a 401(k). The money grows tax-free and you don't have to pay taxes on the money when you withdraw it at retirement. "With the Roth, it all belongs to you," adds Roge.

For those whose have 401(k) plans

with

matching contributions from employers, Roge suggests that investors maximize that tax-deferred investment vehicle first. Matching contributions are basically free money.

Reduce Your Paper Trail and Simplify

If you are having trouble keeping track of numerous bank, brokerage and mutual fund accounts, it's time to consolidate.

Roge recalls one client who came to his firm with a particularly heavy burden. "We had a retired widow with 53 separate accounts. There were no IRAs. It was just straight money. The woman was so confused," he recalls.

By rolling all your investments into a single account at a financial supermarket, your record-keeping should be less cumbersome and confusing at the end of 1999.

Diversify

This term is about as stale as a

Dudley Moore

movie. Nevertheless the exercise is essential.

Spread your investments across asset classes: domestic equities, international equities, bonds, even real estate, perhaps. "They don't all march to the same tune at precisely the same time," says Roge. This diversification should help mitigate some volatility over a three- to five-year period.

Don't Hold Too Many Funds

Make sure your funds are not invested in same securities, says Robert Levitt, a financial adviser with

Evensky Brown Katz & Levitt

. If there is a lot of overlap, this may be the time to trim the number of funds in your portfolio.

If you own five or six growth-and-income funds, for example, look at their top 10 holdings to check for duplication. Any significant overlap may mean that you are not getting the diversification that you think you are.

Count Every Cent

Now is the time to

really

start keeping track of what you spend every day, which should certainly help you start saving more. Robert Levitt says, "Write down everything you spend every day and record your expenses in

Quicken

to see where your money is going."

In particular, Mutual Funds Editor David Landis resolves to keep a better record of his cash expenditures. To that end, Landis plans to start using his credit cards more. That way he has precise statements of what he is spending. "Everything I put on the credit card I put into Quicken," he says. "We pay off our cards every month, so interest charges are not a problem."

Drive Past That Outlet Mall

Avoid making frivolous purchases and succumbing to the temptation of items that have been marked down. "Remember that even though it's on sale you are still spending money," says Robert Levitt.

If overspending is a problem, some professionals also suggest spending cash rather than using your credit card. "It's much easier to spend more money when using your credit card," Levitt adds.

Think About Your Heirs

Jim Lee of

Lau & Associates

in Wilmington, Del., says he "will review my estate plans and have my will drafted before I go to Uganda in the spring. It's on my very short list of things to do before leaving."

Everyone should review their estate plans every three years. Or get one if you don't have one. Even if you're not going to Uganda.

Comparison-Shop For Insurance

Lee suggests going through your insurance to see if you can find better rates out there, and the Internet is the perfect tool for comparison shopping.

Lee himself was paying $216 a year for $150,000 in term life insurance. Within the last few months, he went on the Internet and (using

www.rightquote.com) found $250,000 in term insurance (10 years with a level premium) for himself for $110 a year. He also bought $100,000 in term insurance for his wife for $108 a year. "We just doubled our insurance coverage and paid the same premium." Lee did the same with his auto insurance.

Keep Your Bank from Nickel-And-Diming You

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Staff Reporter Joe Bousquin is going to try to reduce the fees he pays his bank every month. He estimates that he gives up about $30 a month in ATM charges alone. "I plan to build up a minimum balance to avoid the ATM charges and do little things like using the Internet to order replacement checks. I can order replacement checks for as little as $2.99 online, while my bank charges more than $30."

Stop Putting Money in a Losing Fund

Executive Editor Jamie Heller is planning to stop making automatic investments to the

(FBRSX)

FBR Small Cap Financial fund. (It's not that simple, either. You have to write a letter to the fund company.) "Forget that whole dollar-cost-averaging thing for a fund that's in the red in 1998," she laments.

Teach Your Children Well

Senior Writer Alison Moore plans to start teaching her children about financial planning. "My two children, ages 12 and 7, really got into the Christmas giving spirit this year, saving their allowance and budgeting to buy gifts for family and friends. For the first time money was a tangible issue for both of them as they watched how fast it disappeared," she says.

"This year I'm planning to get them interested in growing their savings by getting them started on a mock stock portfolio of their own choosing. (Though, as a

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reporter I can't actually buy the stocks.) We've already begun exploring some of the possibilities, and their questions about different companies show a lot of insight and interest. I'm hoping success on paper will give them the confidence to make the leap into investing later on -- preferably a lot sooner than their mother did."

Please send me your own financial resolutions for 1999. Email me at

fundforum@thestreet.com and include your full name.

TSC Fund Forum aims to provide general fund information. Under no circumstances does the information in this column represent a recommendation to buy or sell funds or other securities.