December 19, 2002

Achieving New Year’s Resolutions One Step at a Time

In many American households, food is not the only thing left over after the holidays, nor is losing weight the sole New Year’s resolution. Debt can be something like extra holiday pounds, leaving many feeling weighed down after the holidays and prompting vows of changed ways in the upcoming year.

As with weight loss, debt management cannot be accomplished overnight. A series of steps must be taken to achieve the desired outcome according to Debra Pankow, North Dakota State University Extension Service family economic specialist.

Pankow says that households can start the new year on the right financial foot by following these four guidelines:

• Address holiday debt with the "power pay" method. This means making power payments on one credit bill until it’s paid off, and then addressing another and another…until all baggage from the previous year is eliminated.
• Minimize contradictory spending views. It is important to understand your own values and attitudes about money and where these values evolved from, as well as the values of your spending partners (spouses, parents, children).
• Have money meetings in which all members of the family are present to set budget goals and establish a plan to fulfill the goals. The plan should include thorough record keeping and future strategies for checking debt management progress. While the reality of holiday spending is still fresh in your mind, the first family meeting could be dedicated to the creation of a holiday budget for 2003.
• Organize family financial checkups to review the balance sheet, insurance and budget goals. Decide which areas need the most work and attack those first. Then, move on to the issues of lesser importance.

"Think of your household as your own mini-business. It is possible to successfully run your own financial empire," Pankow says. "The secret is to take it one step at a time."

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Source: Debra Pankow, (701) 231-8593, dpankow@ndsuext.nodak.edu
Writer: Teresa Oe, (701) 231-8371, teresa.oe@ndsu.nodak.edu
Editor: Rich Mattern, (701) 231-6136, richard.mattern@ndsu.nodak.edu