How to Break Bad Money Habits in 2012

Tips for avoiding common financial blunders and setting money goals for the new year.

By SHARE

Give yourself permission to let go of the need for precision, and this is perpetuated by the industry, of course. When you sit down, you want to know exactly what your retirement is going to look like in 30 years, and you don't even have any idea where you're going to be next month. That's an overwhelming thing. So, at least start with the idea of understanding where you are today and realize this is going to be a process, and you're going to course-correct.

[See 6 Ways to Destroy Holiday Debt.]

How often should people be looking at their goals? Is it enough to make financial resolutions at the beginning of each year, or should you do it more often?

As often as you can. If you made a plan to do this once a quarter, I think it would be incredibly valuable. For example, let's say you set a goal to save $100 into your child's 529 account, because you decided education was really important, it was something that you really valued. Three months later you wake up and say, "Gosh, we said we'd save $100 a month and we only did that that first month. Is it still really important to us? Yes, it is. Maybe we should automate that." Three months later, again no blame or shame, you think, "Oh wow, look, we saved $100 a month." So I think quarterly is a good time.

Anything else you'd like readers to know about your book?

One of my goals was to write a personal finance book for people who never read personal finance books. And what I mean by that is, there's this group, 35-to-50-year-olds, educated, typically have decent incomes, that are starting to realize, "Wow, I've got some important financial responsibilities that I haven't thought that much about." But you don't really feel like running out and grabbing the latest David Ramsey book or whatever. So it was a personal finance book written for people who would never read personal finance books, and it's not meant to be prescriptive. It's really meant to sort of open the door to a bunch of conversations, because a friend of mine always says that "Personal finance is more personal than it is finance." So I think one of the challenges is trying to get people the tools to have the right conversations instead of being very prescriptive about exactly what you should do.

@USNewsMoney