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Keep your eyes on the road and your hand on your wallet
How often have you found yourself driving down the highway only to discover you missed your exit? As an expert driver, this probably doesn't happen very often, but everyone does this once in a while. And when you do, getting yourself turned around can often be a real pain.

By Steve Freidell, Land Line contributor

Managing your finances is much the same as attentive driving. It's all too easy to take your eye off your financial goals only to see your previous gains wiped out in a relatively short period of time.

This may have happened to you last year. Throughout 2010, you budgeted and exercised great care with your expenses and, as a result, managed to get a good jump on your debt. Then came the first of the year and the discovery that you overspent on the holidays.

Does this sound familiar? If so, it's important to look back and determine what got you into trouble. Was it the lure of holiday shopping? Did you spend more than budgeted? Did you make some expensive purchases that were unbudgeted for? It's important to determine why you made mistakes and seek ways to avoid making those same mistakes year after year.

If you spent more on holiday gifts than you planned, try being more realistic in your budgeting process for next year. Start today by making notes about what you gave to each person and what you might have done differently. You can also do this for other times of the year such as birthdays, graduations, weddings, etc.

Make a list of all these expected gift giving situations and make a calendar of the dates. Determine a budget for each month and incorporate it into your monthly savings and expense plans. Put your notes in a safe place. At the start of each month, pull those notes out and refresh your memory about what you'll need to buy and how much you've allowed yourself to spend. It's also best to pare down that list and eliminate unnecessary gifts to people who are unimportant to the family's goals.

Did you or your spouse make an unbudgeted major expense on that new big screen TV and now you find yourself with your credit cards all charged up? If so, you need to establish controls within your budget and checkbook to keep from doing this to yourself.

Start by not carrying your credit cards in the same wallet as your cash. Having to access your card from a different location might make you think twice. Think about paying cash for everything, and make it a requirement that you and your significant other must personally approve every expenditure that goes on the credit card.

If that fails, next year, lock up your credit cards in early November in a place where you can't easily access them, or convert to prepaid credit cards.

Again, you know yourself better than anyone else. Find ways to place roadblocks in front of areas where you make bad financial decisions to keep yourself and your family from facing this same financial inattentiveness next year.

No one enjoys admitting their mistakes, but it's significantly more enjoyable seeing those credit cards paid down rather than starting all over again year after year. Retracing miles driven is a waste of time, money and your reputation as an expert driver. LL

This material has been prepared for informational purposes only; it is not intended to provide and should not be relied upon for accounting, legal or tax advice.

Steve Freidell has assisted clients in their cash management, trading, and portfolio management of fixed income securities since 1975. Steve started his career at the First National Bank of Kansas City and later served as first vice president with Commerce Bank, where he served his clients for 25 years. In 2006, he joined the DeWaay organization, the financial management company used by OOIDA. Steve Freidell may be reached at