I LOVE the annual ritual of making New Year's resolutions.
Every year you have another chance. So don't be discouraged if you didn't meet last year's resolutions. Keep trying, especially if at the top of your list was to become a better money manager.
Fidelity Investments found that for the third consecutive year surveying consumers, the top three financial resolutions for 2014 are saving more, paying off debt and spending less. As you begin listing the things you want to change about your finances in the New Year, I want you to think a little differently about the promises to yourself. I have four resolutions I want you to add to your list. You might not think they affect your finances, but they can impact your financial well-being.
* Resolve to mend broken relationships. It's so easy to let deep-seated issues tear you apart from people in your family. But it may be those very people you will need in a tough financial situation.
I'm not suggesting that you be nice to your siblings or relatives just so they can bail you out, especially if you're a poor money manager. But as we learned in the last recession, we may need to lean on folks when we fall financially. And you're not likely to be able to lean on somebody you haven't talked to in years. Maybe things can't be resolved. Some relationships might be too toxic to fix. But with family counseling or individual therapy, you might be able to resolve the issues that drove you apart. It's worth the try.
Here's something else to consider: Who is going to take care of you in your old age? If you're estranged from your adult children or other relatives, who will help you if you need long-term care? About 18 percent of Americans have provided or currently provide long-term care for someone, according to a study by Northwestern Mutual. One of the things I hear often from caregivers is that they can't get their adult siblings to help take care of a parent. And why? Issues. Hurt feelings. I asked a group of seniors if they could expect help from their adult children. Many lowered their heads or admitted they didn't have a good enough relationship to expect help.
Even if you have money to pay for your care, you'll need someone to help monitor both the nursing assistance and you.
* Resolve to become healthier. For many people, health care will be one of their largest expenses in retirement. A couple age 65 who retired in 2013 are estimated to need $220,000 to cover medical expenses throughout retirement, according to Fidelity Benefits Consulting. By the way, this estimate does not include any costs associated with nursing-home care. It applies only to retirees with traditional Medicare insurance coverage. It does not include other health-related expenses, such as over-the-counter medications, most dental services and long-term care. Here's a key to that estimate: It's calculated for average retirees, but the cost could be more or less, depending on where you live, your longevity and your health.
Fidelity says many people nearing retirement underestimate the amount of savings they may need to cover health-care costs. In one poll, respondents guessed that they would need only $50,000.
I'm trying to take my own advice. I've been taking classes called aqua spin at a local county-run community center. I have arthritis, and riding a stationary bike underwater is less stressful on my joints.
So to save money, get healthy or healthier. Eat better. Exercise. Your health can have a big impact on your wealth.
* Resolve to become connected in your community. We know that the safety nets created by states and the federal government are not enough. So where can you turn if you need help?
If you've been involved in your community, you'll have better resources and know more about where to go if you find that you need financial assistance. I often consult the people with whom I volunteer for information that will help those in need. You can't tap contacts you haven't made because you don't have time to volunteer.
* Resolve to help the poor. This resolution is a bit different from the previous one. Serving others less fortunate may help you realize how much you have. As a result, you may come to the understanding that you don't need to spend so much or go into debt to get more stuff. A lot of people volunteer to help the needy around the holidays. But the need is great all year. And here's the bonus to you: When you help people who have much less than you, it tends to put your wants in perspective.