2010 Is a Fine Time to Assess Family Finances

Reading the tea leaves, the consensus among economists paints a somewhat drab picture for 2010. In fact, if it were a color, 2010 might be Institutional Gray, a drab spoke on the color wheel that neither excites nor diminishes. Unemployment appears to be turning for the better ever so slightly as are salaries. Your 401k should see modest gains. The cost of living will rise but inflation doesn’t appear to be a looming threat. Compared to 2008 and 2009, this is all good news.

For the family chief financial officer (CFO), 2010 is the year to develop good financial practices. While the past few years might have dictated stop-gap measures to deal with financial distress (job loss, home equity loss, declining access to credit), this is the year you should put together a long-range plan for your family’s continued financial health. This includes tracking expenditures and income over a few months to establish real world data for your budget planning. You should also develop long-term savings goals, such as saving for your child’s tuition and your retirement. If you already had, readjust your timelines and goals as necessary to reflect the realities of the new economy.

Like many others, you might have depleted your six-month emergency fund. Now’s a good time to start building your reserve once again. If, for any reason, health insurance was a casualty of your enforced austerity, it is time to sign up with a reputable healthcare provider. Most important, put the primary lesson of the Great Recession into action; every family, just like every business, needs a comprehensive financial plan.