There are some signs of economic recovery for the new year, but few are predicting much job growth. Therefore, you need to be as financially disciplined (or more) than you were in 2011.
For the new year, you should check your safety net. Is it tight and strong? Will it hold up if you lose your job (assuming you haven't already)?
Then evaluate your retirement accounts. I like CNN Money's retirement planner. It gives a lot of variables that you can change to see the likelihood of meeting your goals. If you aren't on track to have what you need to retire, then increase your retirement savings.
If you don't have an investment plan or strategy begin one. Resolve to at least begin a minimum automatic deposit into a mutual fund that is indexed to the stock market. Treat this as if it's something that you won't touch for years, even though you might.
Review your debt. What can you pay down? Pay down credit cards and other higher interest loans. If you have a loan at over 6% interest, then you need to pay it off as soon as possible.
I'm not a huge fan of paying off low interest mortgages. If you have good credit right now, you can get a mortgage under 4%. At that rate, it's almost a no brainer to find investments that are more attractive. Then you just have to have the discipline to put some extra money aside. In addition, this strategy allows you to have the money available if you need it. A good medium term bond fund will make somewhere in the neighborhood of 5% to 6% right now. If you pay off your mortgage, then all of your money is stuck in your home, and you can't get to that money without selling your house or taking out a line of credit later. If you invest the money in a tax-free municipal bond fund or a short term taxable bond fund, the money will be available to you. The key is to make sure that you are disciplined enough to make the investment. You can easily calculate (through various web calculators) what you would need to do to pay off your mortgage in ten years rather than thirty years (for example). You can then resolve to pay yourself by investing the difference between your current mortgage and what it would take to pay off the mortgage early.
If you are buying a new car in 2012, make sure you get a great deal and no interest. On the other hand, consider purchasing a used car. It's a much better financial move in most cases, especially if you remember to bargain. A two or three year old car can often be found and a great discount or look for a four or five year old car with very low mileage. The other thing to consider is to simply save for a car for 2013 and use 2012 as a savings year. The best way to buy cars is to pay cash. It's hard to imagine for a lot of people, but once you get into the mindset, then it can be done. I've paid cash for every car that I've bought since 1981. The key is that first transition away from a loan. You may not be able to afford your dream car the first time that you move to this strategy, but it will put you way ahead in the long run.
Another strategy for cars is to simply keep the one that you have a little longer. With car reliability these days, most people buy a new car long before they need one. A common saying is that the cheapest car that you'll ever own is the one that you have. This is almost always true. This is another reason to save and not borrow for a car. If you save for a car, then you have the freedom to decide whether to fix and existing car or buy a new one. If you have a loan, especially if the size of the loan prevents you from saving, then you are stuck. I've even seen friends with car loans that are upside down on the car loan, but can't (or don't) save, then they can't get the car fixed if something major happens and they can't buy a new one so they are stuck.
Entertainment expenditures are also attractive right now. Movies and music come out all the time. Gadgets and new televisions come out all the time as well. What is the real benefit of owning these? How many do you really use? I have to admit. I love the idea of a new big TV. With prices dropping, you may be tempted to go out and buy a new TV or other piece of gear. I have had to discipline myself over the years. I use a couple of criteria for determining electronics purchases. First, it's pretty obvious that none of us NEED a new piece of electronics or media. So, I always want to ask how I'm doing on my savings, investing, and retirement goals prior to purchasing anything in this category. You also want to make sure that you NEVER use debt to purchase any media or electronic item. There is no financial payback. It is a waste of money. I know people who were offended that a major retailer turned them down to purchase a big screen TV on credit. The television was about a $1,200 unit. Let me simply say that no one NEEDS a $1,200 television. If you can't save for it and if you haven't got your other savings in place. Then don't buy it.
Much of the advice about electronics and entertainment goes for almost everything else you purchase. Any large ticket item, especially, should not be bought on credit and should only be purchased if you absolutely need it and your have the rest of your financial house in order.
All the best to you for a financially disciplined new year and a great personal economic recovery!
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