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Get It Together: Now is the time to put your finances in order

A new year doesn't mean that last year's finances are going away.

And if your financial picture is unsettled, or you're unsure about the future, experts say now is a great time to change that -- whether it's a resolution or not.

Financial planners and accountants in the Northern San Joaquin Valley had these suggestions for making a strong start to 2008:

Taxes

- The point at which you sit down, alone or with a preparer, to determine your tax liability in the new year also is a good time to examine the rest of your finances, according to experts.

- Some experts said many middle-class taxpayers will want to ask about the alternative minimum tax, which was changed late last year by Congress. The changes could result in a bigger refund for some payers, but that refund might not come as quickly as in other years.

- Amy Wilson, a certified public accountant with Modesto's Wahl, Willemse & Wilson LLP accounting firm, said taxpayers who recently have sold a house, particularly a "short sell" for mortgage-related reasons, may have more tax issues to resolve than normal.

"It is always a good idea to consult a tax professional when dealing with a complex issue such as this," she said in an e-mail.

Wilson added that taxpayers in that situation should know the original purchase price, the amount of debt forgiveness and the property's history of loan refinances, among other information.

Investments

- The ups and downs of the stock market are important in how muchrisk and turbulence you can take, experts say.

"Your allocations to your investments should match where you're at in life and what your tolerance for risk is," said Marc Stocks, a financial investment adviser and planner with Genworth Securities in Turlock.

- Diversifying your investments can be like antacid for indigestion from financial market upheavals.

Greg Crawford of Crawford Financial Planning & Consulting in Modesto suggests taking a long-term approach. While some sectors have taken hits, the stock market as a whole finished on a positive note in 2007, he said.

- What to do with your investments depends on what you want investments to do for you, said Terry Swehla, a certified financial planner with Waypoint Financial Advisors in Modesto.

"That relates to your time horizon," he said, explaining that there's a difference in strategies between someone who plans to retire in the next five years and someone who just has started working.

Personal spending

- Credit is tightening, so create an adequate cash reserve, said Terry Swehla, a certified financial planner of Waypoint Financial Advisors in Modesto.

Swehla said such a reserve should be easy to draw from, and shouldn't be borrowed money.

- Think about how your finances might look in a few months. Certified financial planner Greg Crawford said some industries, particularly those related to real estate, could see more job losses in the new year.

"Making emergency funds isn't sexy, but those funds come in handy," said Crawford, who runs Crawford Financial Planning & Consulting in Modesto.

Other areasA new year doesn't mean that last year's finances are going away.

And if your financial picture is unsettled, or you're unsure about the future, experts say now is a great time to change that -- whether it's a resolution or not.

Financial planners and accountants in the Northern San Joaquin Valley had these suggestions for making a strong start to 2008:

- Many experts believe that more rough times are ahead for home mortgages, and homeowners should look at whether their loan interest rate is set to change.

Greg Crawford, of Crawford Financial Planning & Consulting in Modesto, said it is not too soon to call your lender and discuss your options if the rate will reset.

"To be ready for the next increase, that's vital," he said. "The general credit crunch has no end in sight."

- Business owners need to look at how their businesses could perform in 2008.

A soft economy could hurt retail and real estate, and other areas may be affected, as well.

Marc Stocks, a financial investment adviser and planner with Genworth Securities in Turlock, said a well-run business also should take health care and retirement plans for employees into account.

"Many people think about selling their business for millions, and forget about their savings," he added.

Stocks said that, overall, he's optimistic about 2008.

"Money is going to be tighter and the economy will be slower, but the dollar is going to rebound," he said.

To comment, click on the link with this story at www.modbee.com. Bee staff writer Ben van der Meer

can be reached at bvandermeer@modbee.com or 578-2331.

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