As we say start 2006 we find it is a good time to look back on the prior year for some important financial lessons learned. Consider upgrading your financial plan by taking the following actions:

Prepare for Disaster
With several hurricanes and other natural or man-made disasters occurring in 2005, we saw the importance of having a disaster plan in place for both our family and business. Be sure to keep all important financial documents together in a small fire and water proof box so they are protected and readily available. Also consider digitizing them for storage on remote servers and maintaining physical copies of important mementos or documents in a safe deposit box or with trusted family members in another city. Take time to review your current insurance coverage to be sure it adequately covers your home and business needs.

Establish and Maintain Good Credit
A strong credit history has long been important to your financial health. In 2005, the change in bankruptcy laws upped the ante by making it harder to obtain protection from creditors. Start by obtaining a copy of your credit report and reviewing for accuracy. Reports can be obtained for a fee from credit reporting agencies or you can obtain your free copy from each of the bureaus (as mandated by federal law) by visiting www.annualcreditreport.com. Make a goal to keep your credit score above 720 (based on a range of 300-850).

Protect from Identity Theft
With identity theft on the rise, it is essential to take steps that will help you avoid losing months or years cleaning up the mess it can make of your credit. Be sure to:

• Keep an eye on your credit report for any suspicious use or unauthorized inquiries. Carefully review credit card statements for any charges that were not initiated by authorized users, regardless of how small the charge. We once caught fraudulent use of a credit card early that started with a small charge of under $25 at gas station.
• Purchase a cross-cut shredder and use it to dispose of any trash containing personal or business information
• Install a good virus protection program on your computer and only download files sent to you by people you know. Avoid chain letter type emails.
• Never respond to email solicitations asking for personal information or passwords, even if it appears to be from a bank or other known provider. Avoid this type of “phising” by only initiating transactions online.
• Use passwords and pin numbers that are difficult to guess AND change them often. Avoid using the same password or pin number for every account.
• Keep confidential information secure from visitors or employees in both your home and office.

Think Green
Gas prices are on the rise and unlikely to fall below $2.00 per gallon anytime soon. If shopping for a new vehicle, consider purchasing a fuel efficient model to save money and natural resources. The IRS has provided additional incentive to think green by providing substantial tax credits for purchasing qualifying hybrids or clean-energy vehicles. These dollar-for-dollar tax credits could reduce your 2006 tax bill by up to $3,400 depending on the type of vehicle you purchase.

Maximize Retirement Savings
Retirement plans provide for the ability to accumulate wealth either tax-free or tax-deferred. Many plans also provide a tax deduction for contributions. These tax benefits are in addition to those offered through any employee match. There are also new benefits available under the Roth 401(k) plan starting in 2006. Make a goal to not only learn about the different types of retirement plans but to maximize your contributions for benefits now and in retirement.