- What's the most effective single action people can take to ensure they stick to their financial plans?
- Jean: Automate your saving. The 401K plans are really successful if you look at the research. They get people to save regularly. The key is to replicate plans like that in the rest of your life. If you have to remind yourself to save money every month, you're just not going to do it. Life is going to get in the way.
- How best to do this?
- Jean: If you automate your saving by moving your money from checking into savings, or into an IRA, health savings account (HSA), college savings account, or into a 401K... or even into an account to fund your next vacation, you will be successful. The banking system -- the now very much online banking system -- enables people to do that with very little effort at all and (almost) no additional cost. As long as you maintain a minimum balance in your primary account with your bank, many banks will let you open up different accounts for different goals, and allow you to fund them.
- Is a good financial advisor (or CFP) the best way to keep people honest about their spending?
- Jean: I think tracking your spending is the best way to keep it honest. I'm a believer in having a financial advisor. I think for many, many people they are incredibly useful and helpful and yes, can keep you on track. Anything that you do when you talk about it with another person is going to help you stay accountable. You can also do it yourself by tracking your own spending online or by talking to your spouse about it.
- What's the most common thing people are overspending on these days?
- Jean: I teach money school classes online, and I often ask polling questions of my students about where they feel their money is slipping through their fingers most often... and food, without a doubt is number one.
- Because people love to eat out?
- Jean: People eat on the run so much these days. You pick up a cup of coffee, a sandwich, a snack at four o' clock. You grab a drink with a friend on your way home from work, and all of a sudden, you've spent $30 and have nothing to show for it.
Even if you're one of those people who cooks, too few people actually shop with a grocery list so they end up in the grocery store far too often. If you can go to the grocery store just once a week, instead of making multiple trips, you can actually cut your grocery budget by half.
- What's the most forgotten ingredient when it comes to successful financial planning?
- Jean: The plan is the most forgotten ingredient. You need an overall road map, no matter what your goal is. I ran my first marathon last year. So I'm on the Internet and I pull out the schedule from MarathonRookie.com. It was a road map that said on this day, on this week, if you do this many miles on a Monday, this many on a Wednesday, and this many on a Friday ... I followed it and ran the race and won no medals, but I finished running (which was my goal). People need that for their life ... and certainly for their finances. If they want to get to the end of the road, and to have enough money to support them in what has become an increasingly longer retirement.
- Is saving for retirement getting the shaft?
- Jean: Yeah.
- Is this because we think about what we need now versus what's in our best interests for later?
- Jean: I think so. I think that is exactly what happens. We focus so much on the here and now that we don't focus as much on what's coming down the pike.
- Forecasting moment: What's the #1 trend to watch for in 2014?
- Jean: The trend that has been most interesting to me over the past couple of years and I see it continuing is learning to use the developments in behavorial finance and economics to help ourselves get out of our own way and succeed financially. In the past couple of years, we know that when companies big brother their employees and automatically opt them into 401K plans and then automatically escalate their contributions, employees do much, much better when it comes to saving for retirement. We're learning a lot more about how to help ourselves succeed, and I think we'll continue to do that.
- Once tax day approaches, what's the #1 thing people should look for in an accountant?
- Jean: I think you look out for somebody who understands the ins-and-outs of your particular business or industry. I'm a journalist who does a lot of freelance work. I want somebody who's skilled at managing somebody with multiple streams of income.
- For 2014, what are the five best steps to securing your financial future at home?
- Jean: I think there are only five steps:
1) You have to make a decent living.
2) You have to spend less than you make.
3) You have to save and then invest the money that you're not spending so that it can work for you (as hard as you're working for yourself).
4) You have to protect your financial life with a basic estate plan and the right insurance policies.
5) And you have to give back in some way that's meaningful for you.
If you do those five things consistently, you'll have no trouble.
Like Jean's advice? Check into Jean Chatzky's Money School, a college-style online person finance course series taught by Jean to help you get your finances on track. Learn more at her website. Follow her on Twitter @JeanChatzky.
Find a Financial Advisor near you »
Getting Your Financial House in Order for 2014
Start the year off smart with tips from NBC's TODAY show editor, Jean Chatzky.
Another holiday has been safely put to bed, and with it all that extra spending on items such as those diamond-encrusted earmuffs your spouse just "had to have." Now it's time to buckle down for 2014 and sock away all that extra retirement money you've been promising your future self. But how? Jean Chatzky, financial editor of NBC's TODAY show has thoughts. Here they are.