By now, you have likely received your 2010 Census forms in the mail. Some of you, like myself, have probably already completed and returned the form; I had to otherwise it may have gotten misplaced and not returned at all. For those who have not returned your form yet, I hope this blog encourages you to do so as soon as possible.

What is the Census?

The Census is an official count of every household in the United States, including non-residents. The Constitution requires that a count be conducted every 10 years. This year the Census is made up of only 10 questions. It is estimated that it should take about 10 minutes to complete the form. The Census asks questions about:

• number of people living in your household
• racial and ethnic background
• age and sex
• homeownership status

Why is it Important?

The information collected from the census is used not only to determine population in the U.S., but also to determine the number of seats each state will occupy in the U.S. House of Representatives. Electoral districts and constituency boundaries are set using census data. Additionally, census data is sometimes used to advocate for causes, or assist in research.

As I began my journey to complete my family tree, I used census data to locate my relatives. Surprisingly, I was able to go back to the 1800s! Without the census data, my family tree would have stopped at my great grandparents. Think about your great grandchildren that are one day going to want to complete their family tree, but you won't be there, because you weren't counted.

How does it benefit your community?

On a more practical note, it makes sense to participate in the census because census information is used to determine the needs in your community. Census data is used to determine how more than $400 billion of federal funding is spent on:

• Schools
• Hospitals
• Senior centers
• Job training
• Bridges, roads and other public works projects

If accurate information is not collected, your community could miss out on appropriate representation in government as well as vital services.

Is your information private?

Some of the public express concern about census information being used against them in the case of receiving government benefits, possible incrimination or potential deportation, in the case of illegal aliens. Census data cannot identify a person by name, address, social security number, etc. Identifying information collected from the census, by law, cannot be shared with the public or even government entities such as the IRS, FBI or CIA. Census bureau employees must take an oath for life to protect identifiable information.

What can you do to help?

At the end of each workshop, I try to remind everyone about the importance of completing the census. Once you have mailed your form, encourage others to complete their census forms in a timely manner. The census bureau welcomes your help in getting the word out. The census bureau has partnered with government, non-profit, corporate, and educational institutions. To sign up as a 2010 Census partner, visit 2010 Census.

Today we welcome guest blogger, Wes Sprague -- a University of Illinois student.

For retirees aged 65 and older, Medicare has been an enormous social success. It has helped to vastly reduce the level of senior poverty in America by providing most every retiree over the age of 65 with public health insurance, yet there are still many ways that it needs to be improved in order to meet the needs of post-retiree Americans that have paid into our social welfare system. As we move forward with heated health care reform in Washington, it's important to understand why these issues exist, especially in today's bi-partisan political environment, and how they will affect the health benefits of both current and future retirees.

Here is an outline of the major issues facing health care reform with regard to the special interests of retirees and what Washington needs to do in order to mend the system:

• Bridge the gap for Early Retirees.

According to the 2008 US Census, Medicare (public health insurance) covers 92.6% of people over the age of 65, making it the single largest primary health insurer of retirees (Turner, Boudreaux and Lynch). However, in 2007, more than 4 million people ages 55 – 64 (12.4% of the age cohort) were without health coverage (Jacobson, Schwartz and Neuman) suggesting that early retirees face a significant impetus to purchase health insurance between the years when employer health insurance stops and when eligibility for Medicare begins after age 65. With rising health care costs, people in this age group, especially those who are not eligible for Medicaid, want the ability to buy in to Medicare to receive preventive care when health risks are less significant and for major medical coverage.

• Fill the "Donut Hole".

During the Bush Administration, congress ruled on Medicare Part D, which created a gap of more than $3,200 in prescription drug coverage from $2,510 to $5,726 where no benefits would be paid if prescription expenses fell within that range (Hall). This created what has been dubbed the "donut hole". Approximately one in four seniors continues to pay premiums for Medicare Part D and the cost of their prescriptions (Hall). On one hand, seniors could stop paying the premium once they fall into the benefit gap; however this forfeits their right to be in the program during the next year, placing them at significant medical and financial risk (Hall). Closing the "donut hole" needs to be one of the significant talking points to Health Care Reform as it places seniors in a position to avoid prescription health treatments.

• Bring down the costs of Long-Term Care.

Serious debate about Long-Term Care has been off the table since the Pepper Commission over a decade ago, however as baby boomers age, the US will see a shift in the population distribution towards an increasing proportion of senior citizens in America (Clark, Burkhauser and Moon 318). With this shift, Long-Term Care will become increasingly more important as seniors become too disabled to handle daily activities. The cost of Long-Term Care has increased over time due to the nature of its continuous care, so the cost of Long-Term Care insurance has followed suit. This has made Long-Term Care insurance unaffordable for most middle-class Americans, placing significant pressure on state funded Medicaid programs as a source to relieve the burden that Long-Term Care raises (Clark, Burkhauser and Moon 318-340). Current legislation that should be included in the health care bill includes the CLASS Act by the late Sen. Edward Kennedy (Democrat – Massachusetts) and Rep. Frank Pallone (Democrat – New Jersey) (Easterling). Such legislation can be used to assist middle-class families with the cost of Long-Term Care

• Continue Retiree Health Benefits.

Congress has been debating whether they should reduce or eliminate the tax exclusion of employer-sponsored health insurance (ESI) in order to generate the additional tax revenue to fund expansions in health care coverage (Clemans-Cope, Zuckerman and Williams). While the current exclusion reduces revenues generated by the government, it provides a significant benefit for covered employees and retirees as Medicare often does not cover the full cost of health coverage. Decreasing the ESI exclusion will place significant pressure on employers to reduce or eliminate health care benefits in an environment where health care is already expensive. This places early retirees at significant financial risk if they lose their employer sponsored health benefits; many of whom gave up wage increases over the course of their employment in place of such promised benefits. The bottom line is this: reduction in the ESI exclusion will reduce the availability of employer sponsored health benefits for all Americans. This is not in our nation's best interest.

• Create a Public Option.

There has been a lot of debate over whether a "public plan" option would place unfair pressure on private insurance companies to lower premiums and keep their business practices under control due to the low cost structure that a government plan could potentially provide. While nearly 49 million Americans are uninsured, nearly every insurance lobbyist argues that a "public plan" option would establish a monopoly in the marketplace. However, there is no evidence to support that opinion. One study, designed by the New America Foundation to measure the impact of government insurance plans offered by states nationwide, found that among 30 state governments offering both a public and private option, the private option attracted more customers than the public one (Levey). Since a government public option will most likely target the elderly and the poor, there is a high probability that there won't be a major shift to the "public plan" option as many anti-option proponents would lead Americans to believe due to the enhanced benefits of private health insurance. However, it would have the significant benefit of keeping health insurance premiums in check for the majority of Americans who have the option to give up the additional benefits of private insurance for the low costs of the "public plan" option. This will lower the cost of health care for both early retirees who cannot afford private insurance during Medicare ineligibility and retirees who require supplemental coverage over and above the cost of Medicare.

Works Cited

Clark, Robert L., et al. The Economics of an Aging Society. Malden: Blackwell Publishing, 2004.

Clemans-Cope, Lisa, Stephen Zuckerman and Roberton Williams. "Changes to the Tax Exclusion of Employer-Sponsored Health Insurance Premiums: A Potential Source of Financing for Health Reform." June 2009.

Easterling, Barbera. "What Is at Stake for Retirees in Health Care Debate?" 31 July 2009. Labor Union Bog. 8 November 2009 <http://www.4ibew.com/2009/07/31/what-is-at-stake-for-retirees-in-health-care-debate/>.

Hall, Mike. Prescription Drug Donut Hole: 'Sweetheart Deal' for Big Pharma. 14 July 2009. 8 November 2009 <http://blog.aflcio.org/2009/07/14/prescription-drug-donut-hole-sweetheart-deal-for-big-pharma/>.

Jacobson, Gretchen, Karen Schwartz and Tricia Neuman. Health Insurance Coverage for Older Adults: Implications of a Medicare Buy-In. Menlo Park, CA: Henry J. Kaiser Family Foundation, 2008.

Levey, Noam N. "Health care debate: Will public option be viable?" Chicago Tribune 26 July 2009.

Turner, Joanna, Michel Boudreaux and Victoria Lynch. "A Preliminary Evaluation of Health Insurance Coverage in the 2008 American Community Survey." Survey. U.S. Census Bureau, 2008.

What do you use credit for? Buying a house? Paying for college? Keeping food on the table after months of unemployment? Well, here's something I didn't even know you could use credit for. Nope, not Starbucks. Not vending machines. It's not even real...

If you're into social media, you may be playing online games such as Farmville or Zoo World, Fishville or Mafia Wars. Have you been tempted to "invest" in some virtual goodies for your game that cost real-world money? BusinessWeek quotes Atul Bagga of research firm ThinkEquity as saying that, so far, only a very small percent of players have spent any money. But that could change as EASY CREDIT becomes available in the world of social media.

Apparently, one company thinks that the main barrier to people making these small purchases (examples in the BusinessWeek article ranged from 25 cents to $5.95) is the ease of making the purchase. So they're selling software to the companies behind these games that will allow players to buy now, pay later.

In the title of today's post, I said "virtual debt." I miss-spoke. The debt will be very real and has to be paid with real-world money.

Someday in the future, I can imagine a conversation between two young people:

Young A: "My mom said that, when she was growing up, you only used credit to pay for real stuff, like food and gasoline."

Young B: "Oh yeah? My great-grandmother told me that she remembers when people would only use credit to buy things like a house or pay to go to college. It was something about how you should only use credit to buy things that would increase in value. She even tried to convince me that there was a time when there weren't credit cards. I think she's getting senile."

Young A, shaking her head: "That's so sad. Anyway, why wouldn't I use credit to feed my lions and elephants on Virtually Extinct? It's not like I could let the species die!"

It's time to light the candles, make a wish and celebrate saving money. This week is America Saves Week -- a nationwide celebration and campaign to encourage people to save money. Why save money? I had this question asked of me just last night, and it's a good question. To me saving money is about anticipating good things in the future:

• a special activity with my family,
• a larger purchase than I can afford with one paycheck,
• the ability to pay for expected "unexpected" expenses without having to use credit, and
• a time in my life when I won't be working everyday but still will have financial security (retirement).

The best strategy I know to save is to start NOW and to save REGULARLY. America Saves can help you do this. When you enroll (for FREE) you will set a saving goal; research shows that writing your goal will help you achieve it. Once you've enrolled you will receive a free newsletter and access to other encouragements to keep saving regularly. What do you have to lose? Give it a try! Enroll today.

Looking for tips on how to find money to save? Visit the Plan Well, Retire Well website and read the Start Saving section.

More savings tips can be found at the University of Illinois Extension's Getting Through Tough Financial Times website.

Start saving today and join me in celebrating America Saves Week.

In the next few days, a new law goes into effect that will change the way credit card companies handle your credit card account. The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 will go into effect on February 22, 2010. This new law will impact interest rate adjustments, disclosure requirements, and the issuing of credit to young consumers among other things. I was surprised to learn that many people either were unaware of the new law or didn't know very much about it. I have outlined some of the changes below:

1. Interest rates. Under this law, credit card companies cannot raise a customer's interest rate without providing 45 days notice. If a consumer's interest rate is increased due to late payment, after six months of on-time payments and not exceeding the credit limit, the consumer's rate must be reduced again.

2. Fees. Creditors will no longer be able to charge over-the-limit fees without the consumer's permission. Consumers have to opt-in to have these fees assessed. Otherwise, charges that are over-the-limit- will be rejected. Credit card companies will not be able to charge finance charges based on a double-cycle billing which refers to the practice of charging fees on the previous and current month's balance even if the previous month's balance was paid by the due date.

3. Due Dates. Bills must be mailed out no later than 21 days before the due date. Payments received by 5 p.m. on the due date must be counted as on-time.

4. Disclosure. Gone are the days of small, illegible print. Consumers must be provided full disclosure of the terms and conditions of obtaining credit. Additionally, creditors must notify consumers how long it would take to pay off a credit card balance if only the minimum payment is made as well as inform consumers of the total cost in principal and interest payments.

5. Protection. Young consumers, typically college students under the age of 21, will no longer be able to apply for credit unless they have an adult co-signer or can provide proof that they have the ability to repay the debt. Gift cards were thrown in the mix as well. Under this law, gift cards must remain active for at least five years after the purchase date.

These are some of the changes. If you were one of the many not familiar with this law, check out CreditCards.com for an easy to follow guide on the Credit Card Act or visit Bankrate.com for highlights on the benefits of the new CARD Act. Although laws are put in place to protect us, we all must protect ourselves as well. Don't charge more than you can afford to repay and use credit wisely. For tips on how to use credit wisely, visit our More for Your Money website.

Until we talk again…

What is it that determines whether converting to a Roth is a financially good decision? That's the $64,000 question, and in this case, that amount could literally be the value of the question. Roth conversion calculators abound on the internet, but before you use them, it might help if you understand the significance of the information you'll be asked to provide. And, there are some factors the calculators probably won't take into consideration.

I hope you'll find this information clear and easy to grasp. I appreciate the comment sent by Brenda from Virginia about Part 1 of this series: "Impressive and full of information. It will take a second read to digest all of it, but I plan on coming back!"

As you can see, this decision can be very complex. You may want or need professional advice. Check our Choosing a Financial Professional website for tips on choosing a financial planner or tax expert.

Still to come: My next post will present some scenarios and demonstrate how changing one factor, such as your future income tax rate, can impact whether converting or sticking with your Traditional IRA will come out ahead.

Converting from a traditional to a Roth IRA is a hot topic this year, for a couple of reasons. Two significant barriers - income and filing status - have been removed. And, tax rates will be changing in 2011, making 2010 tax rates look like a good deal. Over the next few days, I'm going to try to pull together all the pieces of information you might need to evaluate whether a Roth conversion makes sense for you. Today, we're going to start by learning the rules about conversions. Hold onto your hat, because some of these are more complicated than the news media has led you to believe.

Rules for Roth Conversions:

Beginning this year (2010), anyone can convert money from a traditional IRA, SEP IRA, or a SIMPLE IRA to a Roth IRA.

• Restrictions based on income or tax filing status have been removed.
• You can also convert money from an employer plan [401(k), 403(b), 457, and profit sharing plans] to a Roth IRA.
• Special rule for SIMPLE plans: In the first two years of participation in a SIMPLE plan, rollover to an account other than another SIMPLE plan is prohibited.

You will owe tax on the amount converted, at your marginal tax rate.

In 2010, you can choose whether to recognize the income and pay the tax in 2010, or whether to spread the income between your 2011 and 2012 tax years and pay the tax at the rates in effect in those years.

Unless new legislation is passed, tax rates will increase in 2011. The laws which reduced tax rates to their current level will expire, and most tax brackets will go up 3% or more.

If you have made non-deductible contributions to an IRA, those amounts will be converted tax-free. However, you cannot convert just the non-deductible contributions. You must add together the balances in all of your traditional IRA accounts (including SEP and SIMPLE IRAs), and calculate the proportion of that total that is from nondeductible contributions.

You can do a conversion at any age. Taxes will apply, but there are no early distribution penalties if you are not yet age 59 ½. If you have a required minimum distribution for the year of the conversion, you must still take that distribution: it cannot be converted.

Conversions can be un-done, or recharacterized, as late as the due date (including extensions) for the tax return for the year in which you did the conversion. So you could have until Oct. 15, 2011 to change your mind about a conversion done in 2010 and put the money back into a Traditional IRA.

Converted amounts on which you pay tax at conversion must be held in the Roth account for five years before distribution. Otherwise, those amounts may be subject to a 10% early distribution penalty. There are exceptions to the 10% penalty. Exceptions include being aged 59½ or older, disabled, a beneficiary rather than the original account owner, and several others. You can find the details about exceptions to the early distribution penalty in Taking Distributions from Tax-Deferred Retirement Plans.

You may need to make estimated tax payments or increase your withholding for the years in which you will recognize the income from the conversion, to avoid penalties for underpaying your taxes.

There are no required minimum distributions from a Roth IRA for the original owner, or for a beneficiary spouse who re-titles the account in his/her own name. There are required minimum distributions for beneficiaries other than a spouse, and for a spouse who leave the account in the name of the deceased.

The conversion can be done by

• trustee-to-trustee transfer,
• converting with the same trustee,
• or a rollover, meaning that you receive the funds and are responsible for depositing them in the new account within 60 days. With a rollover, the original custodian will be required to withhold 20% for taxes. If you want to convert the full balance of the traditional IRA, you will have to make up the difference with other funds.

Now that we've got the rules under our belts, we'll next tackle how to go about deciding whether converting is the right thing for you. So make sure to watch for my next post, which I plan to have up in a couple of days.

If you have questions about Roth conversions that you'd like to have answered, please click on my name below and send me an email. I'll try to address those in a future post.

Don't put all your eggs in one basket. While this might make sense if you're a farmer, why would you care? The mental image of losing all your eggs when you trip over a running chicken can help you remember the importance of diversification with your investment portfolio.

Diversification is an important investment strategy; it helps us manage business and market risk. Let's suppose that Susie Q wants to invest in technology. Clearly choosing to invest in only one tech company would not be a diversified portfolio. If something bad happens to this company (for example, poor management leads to the company failing), then Susie Q would lose all of her investments. To help manage business risk, people choose to invest in more than one company.

What if Susie Q invests in several tech companies such as Dell, Apple and Sony. Does she now have a diversified investment portfolio? No – if something happens to this market sector, and tech stocks as a group lose value, her portfolio will suffer significantly.

To have a diversified stock portfolio, Susie Q will invest in a variety of businesses types such as stocks in pharmaceticul, agribusiness, aerospace, automanufacturing and technology. (Caveat: this is a hypothetical situation; this does not mean you should run out and buy stock in any of these sectors today.) Mutual funds can help people diversify their investments by investing in many companies in different market sectors.

To summarize, diversification in your investment portfolio can help you manage the risk of one company failing (business risk) and the risk of a particular industry doing badly (market risk). To learn more about diversification, visit the "Choosing Investments" section of the Plan Well, Retire Well website.

Bonus Question: If you own a significant amount of your company's stock in your investment portfolio, are you diversified? Think of it this way, if your company fails (which you likely think won't happen, but imagine that it does) and you lose your job AND your investment portfolio's value goes down, were you diversified?

In the wake of natural disasters such as the earthquake that hit Haiti last week, charitable giving is up. With so many organizations claiming to collect for relief efforts, how do you know whom to give your monies to? Through research, I found that there are a few key factors that might help you choose which efforts to support and which to stay away from. Here are a few points to consider when choosing a charity:

1. Find out the percentage of your donation that actually goes towards supporting victims. As a rule of thumb, reputable organizations will use most of your donation to aid victims or provide programs. If most of your donation goes toward administrative costs, the organization is probably one you would want to shy away from.

2. Steer clear of organizations that seem to appear overnight. Organizations which have been around for years and have recognizable names and reputations for helping are probably safer alternatives.

3. Look at the organization's Form 990. This IRS form is filed by organizations exempt from taxation. In addition, it provides financial information on how much the organization spent on administrative, program and fundraising costs.

4. Make sure the charity is legitimate. Don't be fooled by a charity having a similar name to one that you may have heard before. There are watchdog groups that track charitable organizations. Visit their websites to look up the charity you are considering. See the list below.

5. Give your time in lieu of money. If you want to learn more about a charity, volunteer some of your time. Firsthand experience with an organization allows you to get a better feel for who they are and what they do.

6. Avoid identity theft. Never give your credit card or personal information in response to phone, email or door-to-door solicitation. If you would like to give to an organization, visit their website for online giving or write a check. Never give cash.

For those that itemize, the IRS has made your charitable donations to support Haiti relief efforts immediately deductible on your tax return. For more information on this deduction, visit the IRS website.

If you would like to check out a charitable organization, visit one or more of these websites:

BBB Wise Giving Alliance

Charity Navigator

American Institute of Philanthropy

Guidestar

Until we talk again, have a happy new year.

It comes around every year, but it still catches many of us off guard: tax season. So it's time to pull together all the info that you or your tax preparer will need to complete your 1040, 1040A or 1040EZ.

If you find yourself scurrying each year to find records of your donations, business expenses, IRA contributions, or child care payments, this would be a great time to get prepared for NEXT year.

How big is the stack of documents that you use to compute your deductions and prepare your taxes? If your stack is just a few sheets of paper, all you need is a single file folder or envelope. Label it "Current Year Taxes" and put it somewhere handy, preferably close to where you open the mail

Also set up a file folder on your computer labeled the same, Current Year Taxes. Rather than printing documents that you might misplace, you can drag and drop them into their own place on your hard drive.

Throughout the year, whenever you receive a document you MIGHT need when you file your taxes, drop it into the Current Year Taxes folder.

If your situation is more complicated - maybe you have a home-based business or your have numerous investments that generate taxable income - you may need an accordian file or a directory on your computer. Look for natural groups of information to determine the labels for the divisions in your accordion file or your directory. Some might be:

• charitable donations
• investment income
• depreciation records
• utility bills (for a home-based business)
• college expenses

Once this year's taxes are done, move the electronic and paper files to a new folder labeled "Taxes 2010." Now, you're ready to put this year's documents into the Current Year Taxes folders. Next year, it will be a piece of cake.

Did you set any goals for the New Year? I find setting goals to be relatively easy -- it's reaching the goals that is difficult. Especially those goals that require repeating behaviors week after week like losing weight or saving money. Based upon the number of articles I've recently read, it seems I'm not the only one that has trouble staying focused on my goals!

Well, leave it to an economist to come up with a new way to motivate you. Dean Karlan, Economics Professor at Yale University, decided to apply behavioral economics research and help people reach their goals. With others, he formed a company, StickK.com -- a place where you can "put a contract on yourself."

According to the Stickk.com website, "We all need help to reach our goals - whether it's incentives, or support from others. Years of economic and behavioral research show that people who put stakes - either their money or their reputation - on the table are far more likely to actually achieve a goal they set for themselves."

Basically the idea is that you use a stick to motivate yourself to meet your goal. For example, at the website, I could set a financial goal to save 10% of my income in a retirement savings plan each paycheck. If I fail to meet my goal, a stick (of my choosing) would be applied: a donation to a charity would be made at my expense or, even worse, a donation to an anti-charity! An anti-charity is defined as "any organization whose views you strongly oppose, or one which promotes values that are most contrary to your own." The possibility of donating to an anti-charity would motivate me!

Previously I've used the carrot approach to my New Year's Resolutions -- visualizing myself slim in the summer or enjoying a vacation using money saved. But this year, I think I'll try the stick approach and see how that works for me. Of course, you don't have to use a website like StickK.com or one of the many other similar websites that are springing up. Publically declaring your intentions (to a friend or family member) may work as well for you. The embarrassment of not reaching your goals is a stick too.

Here's one other tip for reaching your goals. Be sure you set SMART goals. SMART goals are goals which are:

S -- specific (for example, how much money saved?)

M -- measurable (a way to tell if you are succeeding)

A -- agreed upon (by family members or others affected by the goal)

R -- reasonable (reach high but don't set a goal that you can't achieve)

T -- timed (set a date to achieve your goal or steps to your goal)

The calculators at the Plan Well, Retire Well website may help you set your SMART financial goals.

And, let me know -- does a stick or a carrot help you achieve your financial goals? Click on my name below to send me a note.

On this blog we discuss the importance of saving money, how to invest money wisely, and how to plan for long-term goals such as retirement. We write about these things because we all believe in the value of saving and investing. What we don't tend to talk about is enjoying our money. However, I think it's also important to splurge once in awhile and spend money just for the fun of it!

In the next few days, I wish everyone time to pause from working for money, to be with friends and families, and to enjoy some of the things that we do with our money as well -- whether it's eating, traveling, giving gifts, or whatever you like!

New Year's Resolutions will soon be here again. Have you thought about what yours will be for 2010! The same old ones come to my mind; lose weight, exercise more, take time for myself, help others in need. I always start out with the best ideas; but usually by February 1^st I become so busy with my daily routine that my resolutions are out the window.

So, this year I decided I will make my resolution something I do on an annual basis anyway and re-visit it again in six months for a status check. My resolution for 2010 is to make my annual net worth statement and plan my financial goals for the year. I will check my progress in July. I hope you will consider joining me in my resolution. I think this is one I can actually accomplish. And I know you can too.

Never made a net worth statement? Well here is a quick way to get started, visit the Plan Well, Retire Well website for a quick worksheet. At the website, login and then paste this url http://www.retirewell.uiuc.edu/PWRW/WrkSheets.aspx?WrkShtID=1 into your browser to go directly to the worksheet.

List all your financial assets and debts. Examine the statement carefully. Think about the following questions; compared with last year, have your assets grown and your debts decreased? Are you setting money aside for emergencies? Are you contributing to your retirement plan?

Use your net worth statement as a guide to set financial goals for the year. Questions I am considering; can I increase contributions to my retirement plan this year because I have finally paid off my student loan? Do I have enough set aside for emergencies? Will I be able to take a family vacation this year? Net worth statements and financial goals are different for each of us. Each of us has different resources and values; however, a net worth statement allows you to see the big picture of where you have been and where you are going. I like to think of it as a "reality check", because you can see the actual numbers and plan accordingly.

Remember working toward financial goals is a process. Case in point – it took me 10 years to pay off my student loans so that I now have extra money to invest; but now I don't miss the money so I am putting that towards retirement.

I will check in with you about your progress in July 2010. Make 2010 a year you keep your resolution!