How to create New Year's resolutions that actually work

Most of us resolve to improve; heeding the '3 Rs' help you keep them

By Marcia Frellick

Millions of recession-weary Americans are making New Year's resolutions to spend less, save more and be more responsible with credit. But without a plan, experts say you're likely doomed to fail.

The good news is that with careful and realistic planning, you just might be able to keep that resolution and move closer to your dreams of greater financial stability.

Resolutions are becoming more and more popular amid today's double-digit unemployment and general economic uncertainty. Three in four Americans will make at least one financial-related New Year's resolution in 2010, according to a survey from Omaha-based brokerage TD Ameritrade and the Opinion Research Corp of Princeton, N.J. That's up from 71 percent in 2008. And despite the popular belief that resolutions don't often work, the survey found 60 percent of those who made financial resolutions last year reported they were still "going strong" -- though it is possible that more people say they keep their resolutions than actually keep them.

With that in mind, we spoke with personal finance experts to get their thoughts on what actually works.

The '3 Rs' of resolutions
To start with, they say resolutions that work follow "the three Rs."

They should be:

1. Reasonable.
2. Realistic.
3. Rewarding.

That means that goals shouldn't be so lofty that they're unattainable, and planning for them should include ways to both hold yourself accountable and to pat yourself on the back for a job well done.

Here's more of what these experts had to say.

Kathleen Gurney, CEO
Financial Psychology Corp.
Resolutions are incredibly emotional things. Gurney, a psychologist based in Sarasota, Fla., says you can't forget the emotional component of cutting back. If you do, you're making an already challenging endeavor just that much more difficult.

"When you say you will cut out all family splurges for the next three months, can you emotionally afford that?" Gurney says. "By about February, you may become really resentful that you don't have that time to de-stress with your family."

To keep the emotional impact to a minimum, Gurney offers the following suggestions:

• Remove as many willpower decisions as possible. If your resolution is to spend less and your favorite activity with a friend is shopping, find another way to be together, and let the friend know why. If you are prone to spending what you make, sign up for monthly automated savings.
• Keep track daily. Gurney suggests keeping a daily journal and writing down three things you did well toward keeping your resolutions and three things you need to do to improve. This is a way to reward yourself daily and reinforce the behavior changes you're making.

Leigh Ann Fraley, blogger
"Save Leigh Ann -- The Daily Rantings of a Bulimic Shopper"
Recording daily progress on her spending goals and writing about her debt in a public way made all the difference for Fraley, who racked up $19,947 in credit card debt before she began blogging about her financial struggles in 2005. She maxed out cards despite the fact she was a financial educator at a bank in California and lectured groups on how to manage their finances. Through her blog, she was accountable to herself and her readers.

She wiped out her debt in a year with the moral support of readers who clicked into her blog, which she still maintains. Last year, she was laid off and took on more credit card debt for COBRA insurance payments. But now Fraley, who just turned 40, has been rehired by the bank and has a four-month plan for becoming debt-free again.

She offers this advice on making resolutions:

• Get an accurate picture of what you owe. Stop the denial. Open up the bills and get the real picture, she says. "People usually think they are worse off than they are, and they think there's nothing they can do."
• Don't just vow to give up the lattes. Invest the latte money. "Take that $2.50 and move it over every day into a savings account with online banking. Then you can see it add up."
• Cut up your credit cards if you don't trust yourself. Fraley cut hers up and now keeps the pieces in a transparent box as a warning. (See video: How to cut up a credit card)

Nicole Mladic, blogger
"The Budgeting Babe"
Mladic of Oak Park, Ill., 30, had $25,000 in student loans by the time she moved out of her parents' house. She then quickly realized her reserve was rapidly draining and she had to act. She says setting small, achievable goals and getting educated about finances help maintain resolutions.

Many people her age are struggling with debt. In the TD Ameritrade survey, more than half of Americans between the ages of 18 and 34 said they are more likely to make a financial-related resolution in 2010 than they were in 2009. Mladic offers these suggestions:

• Start small. For instance, open a savings account and vow to save $25 a month instead of saying you will save for a down payment. Also, you can resolve to increase your 401(k) contribution 1 percent at a time. She says she started with 2 percent and is now at 10 percent plus her company's match.
• Get educated. She felt she didn't know nearly enough about finances to reverse her situation and neither did many of the young women she knew. She started a blog called The Budgeting Babe in 2004 and continued it until late summer 2009. Months later, she made her last student loan payment.

Kit Yarrow, consumer psychologist, author
"Gen BuY: How Tweens, Teens and Twenty-Somethings are Revolutionizing Retail"
Yarrow, a psychology and marketing professor at San Francisco's Golden Gate University, says the new year often follows a bloated feeling of overspending, which is a motivator for change.

It's also when people find more support for their resolutions, and that's an important part of maintaining them. Stop-smoking, weight-loss and financial-help programs commonly roll out after the new year. Even if you don't join a group, Yarrow recommends giving a verbal commitment to at least a few people when you make your resolutions.

"It's funny. People will cheat on themselves before they'll cheat on someone else," she says.

She also recommends these tips for keeping resolutions:

• Post tangible reminders. "Visual cues are very important, especially for young people raised on the Internet. Tape up a picture of the thing you are working toward as a constant reminder."
• Emphasize positive action. When making a resolution, she says, focus on what you should do rather than what you should not do. Instead of focusing on not shopping or not having, find something proactive to do, such as budgeting or writing down expenses. In some ways, that will help replace the loss, she says.
• Celebrate a milestone. Acknowledge a month of good budgeting or three months of reducing debt. But don't reach for the wrong reward -- like a spending binge, she says.

But none of this matters if you don't take the first step, and it doesn't have to be January 1 for you to start living in a more financially responsible way. "The reason New Year's resolutions often fail is because if you're motivated enough to change your life you don't need an arbitrary date to do it. ... Changes in behavior come when you seize the moment," Yarrow says.

How to read FICO's explanations of what's hurting your credit score

Don't take the credit critique personally, especially if your score is high

By Erica Sandberg

Opening Credits

Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." Ask a question. 'Opening Credits' stories

Dear Opening Credits,
My credit score is good -- mid-700s. I've heard that there are things that you can do to hurt your score that don't make sense to me. I got my credit report earlier in the year and was shocked to see several comments. I don't recall the exact statements, but this is my understanding of what they meant:

• Too many revolving accounts with balances. I have three credit cards I use regularly. At the time, the total balance was around $1,000. I pay the entire balance off each month.
• Available credit too high. Over the years, several of my cards have gotten updated limits. Discover had me at $21,000. So, I called and had the limits lowered. How much is a reasonable limit to have?
• Too many revolving accounts. I had a few credit cards that I'd never used. So, I closed the accounts. Since then I've heard a few people say this is a bad thing to do. The only debt at the time was our home mortgage. Paid off my car loan a few years ago. Were my actions in error? -- Donita

Dear Donita,
Actions in error? Have some confidence, Donita! You have a terrific credit score. Anything in the 750 range is more than acceptable, which means that even if you weren't trying, you've been doing a lot of things right.

In fact, it looks like you've satisfied the two weightiest factors in a FICO score: payment history (accounts for 35 percent of your credit score) and the amount of debt you have in relation to your credit limit (30 percent). By paying your bills on time and keeping what you owe well below the amount you can actually charge, you've achieved a credit score most lenders would be thrilled with. Check out the box on this page for more information about what goes into your credit score.

Now, what's up with the confusing credit report "explanations"? With such a good score, the statements don't make much sense. Here's why: Many of the comments you are reading are nothing more than stock responses and shouldn't be taken so literally. They aren't actually personalized to your exact situation, but are general suggestions as to why your score isn't at the "perfect" 850.

For further clarification, I turned to Jose Rivas, a financial educator for Consumer Credit Counseling Services of San Francisco (my old haunt). He reviews countless consumer credit reports for this nonprofit organization each year.

"The comments listed seem like the generic suggestions that are written into the mathematical code of the FICO scoring model," says Rivas. "When a credit file is processed by the FICO scoring model, the process will yield a three-digit score, unless you have no credit history, and four recommendations for improving the score. As a person's score gets closer to 850, there is less and less for the FICO model to recommend for improvement, but the process is designed to still yield the four recommendations."

In other words, for individuals like you who have scores in those upper numbers, the explanations about why it's not perfect are kind of meaningless. Why? Because FICO only publishes general information about how a score is determined -- a skeleton, basically, of why your score may go up or down. The meat and bones of the mathematical model they use is proprietary. (They pulled back the curtain a bit in November 2009 when they released some details of how late payments, foreclosures and other mistakes impact your score, but by and large, the scoring remains a mystery.)

Rivas does question the point about your available credit too being too high, saying, "there is no known drawback to having 'too much' available credit. This is usually a lender's feedback, but not likely to be FICO score-related." And because you don't carry over a balance from month to month, I don't see how lowering your credit line with Discover did any significant damage.

In general, it is best to keep older, well-managed credit accounts open. Doing so helps with the "length of credit history" section of a FICO score. Though a relatively minor factor in calculating your score (15 percent), having a long, traceable record of using credit positively works in your favor. However, your excellent score confirms that the effect of closing them has been negligible.

As for having too many revolving accounts with balances, I believe the number of credit cards you have is fine. Having three active credit accounts is generally perceived as ideal. It's balanced: You are not a one trick pony with a single card, and you don't have so many that your reports are overrun with random accounts.

In the end, try to not put too much stock in what random people tell you about credit reports and scores. If you have a question about anything financial, whether it's credit reports or investing, go straight to the source. I'm not suggesting that your best friend, sister-in-law or coworker is incorrect or isn't knowledgeable, but it's always best to get information on such important subjects from professionals who are actually in the business.

Just keep doing what you're doing, Donita. Your credit intuition is on the mark.

Chrome Bags Soyuz Laptop Backpack Review

BY: Jerry Jackson, NotebookReview.com Editor
PUBLISHED: 12/28/2009

If you're looking for the perfect laptop bag for your new notebook then you may be in luck. Chrome Bags promises the Soyuz laptop backpack is the ultimate solution for road warriors who are constantly running between the office and the gym ... or maybe need to join a conference call from the beach. Is this $180 laptop backpack worth your holiday cash? Keep reading to find out.

Soyuz Specifcations:

• Dimensions: 21 x 14 x 6 inches (L x W x H)
• 1000 Denier Cordura Body
• Airmesh Strap Construction
• Waterproof RF Welded Urethane Roll-top Main Chamber
• Ergonomic EVA Compression Molded Back Panel
• PVC Coated Weatherproof YKK Zippers
• Full Shoulder Strap Accessory Attachment Belts
• Industrial Metal Cam Locks Under Arm Compression Buckles
• 11" x 17" File Pocket With Organization Pockets
• Five Additional Weatherproof Cargo Pockets
• MSRP: $180.00 (available at www.chromebags.com)

Build and Design
The designers at Chrome Bags are obviously aware that modern road warriors don't haul the "traditional" mobile office anymore. Today your average mobile professional brings a notebook PC, a smartphone, and a variety of personal items ranging from a day's worth of clothes for an overnight business meeting or an outfit for the afternoon workout.

The Soyuz laptop backpack meets these needs and more thanks to dual primary compartments, multiple weatherproof pockets, and a sleek design that easily fits inside the overhead compartment on a flight or under the seat in front of you. The main roll-top backpack compartment is fully waterproof with a seam-sealed main chamber that will keep sweaty workout clothes away from delicate electronics or keep your beach clothes separate from your laptop. The side-access laptop compartment features a moderately padded section for your notebook and a divider for paper files or hard copies of your next business presentation. Another compact waterproof compartment on the front of the bag is the perfect place to store USB flash drives or any other small items you want to keep dry.

User Comfort
Of course, all of the waterproof storage in the world won't help a backpack that isn't comfortable on your shoulders and your back. Thankfully, the Soyuz is exceptionally comfortable thanks to shoulder straps that have airmesh padding and a back panel with ergonomic pads. While the surface of the shoulder straps that faces your shoulders has great breathable padding it's the front of the shoulder straps that I found particularly impressive. The front of the shoulder straps features seatbelt-quality reinforcement straps for added durability and metal compression buckles to keep the shoulder straps set to the right length. Shoulder straps are usually the first thing to fail on most of my laptop backpacks because I haul multiple notebooks and netbooks when traveling (I review these things for a living, after all). The straps on the Soyuz feel so rugged that I suspect they can handle any abuse I inflict upon them. If you prefer to carry your backpackl one handed using the top handle then you'll be pleased to know that the top handle feels nice and strong ... but the roll-top enclosure at the top of the bag does get in the way of the handle sometimes.

Usability Issues
The Soyuz proved itself to be a fantastic travel companion during my month-long test of the backpack. I used the Soyuz as my daily work bag and as my only carry-on bag for several business flights. Not only was the slim profile of the Soyuz easy to squeeze into overhead compartments and under seats, but the rugged construction held up to scrapes, drops, and more than a few rain showers without damaging the contents of the bag.

That said, I often found myself wondering if the Soyuz had enough padding around the main laptop compartment. None of the notebooks or netbooks I used during the review period were damaged in any way, but the padding on this bag "looks" thinner than what I see in most of the bags that arrive in our office. As mentoned before, the top handle on the bag is often obstructed by the roll-top enclosure, so if you don't roll the top as tight as possible before closing the Velcro then you might not be able to get a good grip on the top handle. Other than these issues I can't say there were any major usability problems with the Soyuz. As long as you don't attempt to overstuff the bag with multiple laptops, a change of clothes, paperwork, and your lunch then this bag has all the room you're likely to need for a work day or an overnight business trip.

Conclusion
The Russian word "Soyuz" means "Union" in English, and I think it's fair to say that the Soyuz laptop backpack from Chrome Bags is the perfect union of form and function. The Soyuz is the ideal companion for urban road warriors who need to jump between the office and an active lifestyle. The interior of this backpack offers enough storage to get you through a day's worth of work and play and it's rugged enough to last as long (or longer) than you do.

If I have any criticism about this backpack it's that the roll-top enclosure sometimes gets in the way of the top handle, the laptop compartment could use a little more padding, and the waterproof Urethane elements might look a little unappealing to some business professionals (though I think it looks great). Still, the Soyuz is a fantastic premium backpack at the $180 price point and might be the perfect choice for someone looking for a new laptop bag.

Pros:

• Attractive industrial design
• Weatherproof and rugged
• Abundant compartments

Cons:

• Limited laptop compartment padding
• Industrial design might look unprofessional

By Greg Ross

Symantec pcAnywhere 12.5 is a remote control application that allows users to operate a computer from any other computer in the world -- include PCs running a different operating system. Is pcAnywhere really the ultimate cross-platform remote desktop tool? We put it to the test in this review.

Symantec pcAnywhere 12.5 can connect almost any two computers, regardless of what OS either is running. However, as with any non-Web-based remote desktop program, pcAnywhere users need to know the exact IP address of the target computer (which never works well in my experience). Moreover, to connect via the Internet, pcAnywhere requires a third-party VPN.

Program Interface

The basic view for pcAnywhere 12.5 is very self-explanatory and resembles XP's play-toy interface. From here, you can access wizards to start using the most important features of the program. Clicking Remote Control starts up a wizard to connect to a computer at a known location, File Transfer starts up an FTP session wizard with a known pcAnywhere host, and Host launches the program necessary for the local computer to be remotely controlled. Quick Connect pulls up a window that is a little more advanced as it automatically scans for pcAnywhere hosts on the local network (good for home networks with DHCP enabled), and allows the user to invoke encryption protection during the remote session.

Remote Operation provides quick access to settings that largely impact the quality of the remote session experience. High-quality remote session streaming is useful when plenty of network bandwidth is available, while low-quality streaming is best for bridging two computers over the Internet. You can also set up a remote printer that can be accessed during the remote session.

The most important feature found in the Settings tab is the ability to configure pcAnywhere 12.5 to boot automatically with the computer, which I think should be mandatory in any remote access software. Callers are client computers that connect to the host, and a wide range of authentication options are available (including support for Windows user logins). One can never have enough security options in remote access software and pcAnywhere 12.5 certainly excels here.

While the overall user experience with pcAnywhere 12.5 was good, the various layouts and wizards were not exactly user-friendly a times.

When a remote session is running, the target computer's screen is front and center within the same interface.

The web browser version of pcAnywhere 12.5 is not as refined as the main program, but then again the Java web client is meant to be carried around on a USB memory key or used on a computer where the main client program cannot be installed.

Performance

During the evaluation period, the target computer was connected to the internet via a 6Mbit DSL connection. The computer used to access the target was connected to the same DSL connection for a high-speed test, or connected to the internet using a public Wi-Fi hotspot in the same city.

In each test, I never had any issues with input lag or slow refresh rates while I was running office applications. The only time pcAnywhere 12.5 ever had a problem was when I ran my video tests at too high a quality given the network connections I was using. When running on the public Wi-Fi network, pcAnywhere 12.5 defaulted to using low-quality mode with 256 colors. At those settings, I had no issues with input latencies or full screen changes like scrolling and window maximizations.

Performance only got better when pcAnywhere 12.5 was using my 6Mbit connection. Full-screen window changes refreshed in less time and scrolling through long documents was not as stuttered as with some of the competition. Where pcAnywhere 12.5 starts to show off is in successfully streaming video content with decent visual quality. Unfortunately, pcAnywhere 12.5 does not support audio transmissions so the experience was a little bittersweet. Nonetheless pcAnywhere 12.5 provides the best video streaming experience of any remote desktop app I've reviewed.

Connecting to the host using the client's web browser Java application was an interesting experience. Controlling the computer was almost as easy as from the main program, except that I could never get the scrolling wheel to actually work during these sessions. Scrolling was stuttered, but otherwise performance was acceptable given its intent.

Conclusion

In the end, pcAnywhere 12.5 certainly shines. The user interface is not as polished as I would prefer for a consumer application, but there is a wide array of powerful configuration options that are available. Performance was in line with the competition but, under the right circumstances, pcAnywhere 12.5 downright impressed us. It has incredible cross-platform support that should meet just about anyone's demands, and it even has a web interface that operates just like its web-based competitors.

In the end, the adage that 'you get what you pay for' is definitely true when pcAnywhere 12.5 is concerned. At $200 retail, it is certainly an expensive product. However there are no monthly fees and you can use it as long as you wish. Keep this product on the short-list, and look out for rebates.

Pros

• Works with Windows, Linux, and Mac
• Excellent performance, especially with video
• File transfer and multi-monitor support

Cons

• No audio streaming support
• Web access requires third-party VPN
• High up-front cost

IBM Lotus Symphony 1.3 Review

By Jay Garmon

IBM Lotus Symphony is Big Blue's free alternative to MS Office. Can Symphony win a battle of the bands with Microsoft's productivity heavyweight, or does it ring hollow? We sound it out in this review.

Symphony is a forward-thinking and relatively full-featured productivity suite, but it lacks polish in some key areas. It's solid, but I wouldn't pay for it; luckily, it's free. This clunkiness starts with the download process, which involves over a half-dozen screens, requires the creation of an IBM ID, tries to opt you into affiliate e-mail newsletters, and insists the user actively decide between using IBM's Java-based downloader or a regular browser HTTP download. It's that needless lack of user-friendliness that mars an otherwise great app suite.

IBM Lotus Symphony gets high marks for supporting multiple operating systems, including Windows, Mac OS X, and multiple flavors of Linux. It loses marks for its format support, in that it can open multiple file types but can really only save to to handful - notably excluding MS Office 2007 file save options.

Interface and Usability

Symphony shares some ancestry with OpenOffice -- it's based on OpenOffice 1.1.4 source code -- but the two products diverged several iterations ago. Like most office suites, Symphony includes a word processor, spreadsheet and presentation program, but it integrates them in a somewhat unusual fashion. Lotus Symphony 1.3 looks and feels like a recent generation Web browser - in fact, it has a somewhat feature-crippled Web browser built in - in that it employs a tabbed interface for its applications.

Essentially, Symphony lets you open a new spreadsheet, presentation, or document just like you'd open a new tab in Google Chrome or Firefox. Each of these tabs shares a standard menu layout, which means commands don't move around like they do in the current MS Office ribbon interface. When you open a specific tool set, it often generates a sidebar or menu-bar that stays onscreen until you close it. This is handy, but opening too many sidebars can crowd out the actual document.

The tab system also has the advantage of letting you toggle between multiple docs and sheets easily, though I recommend not doing the same with the extremely poor built-in browser. Web connectivity is nonetheless quite essential to Symphony, even though it's conventional software and not a Web app. An online user wiki is your best source of help information, and you can link directly to document templates, plug-ins and widgets from the Symphony Web site.

Widgets are somewhat like Google Gadgets crossed with MS Office Macros, in that they can analyze data in your documents and process them in the sidebar. For example, you could write a widget that reformatted addresses on the fly. They're a good idea in principle, but I had trouble finding a practical application for them.

Lotus Symphony Documents

Lotus Symphony presents a document interface very similar to a MS Word 2003, though there are just enough quirks to give Word power users pause. For example, Symphony has a very solid spellchecker but no grammar-checker or thesaurus. Robust functions that aren't found in most Web-based apps - like mail merge - are present and usable, though not spectacular.

My personal acid test for word processors is the ability to use the find/replace function to making formatting changes. Like OpenOffice, Symphony honors a list of regular expressions that let you create complex find/replace command strings. While I could accomplish most of the same power-tricks that I regularly use in Word, Symphony made me jump through more arcane hoops to get there. Symphony passed my personal hurdle, but it didn't exactly leap over it.

Lotus Symphony Spreadsheets

As I do with every new spreadsheet, I threw the most complicate, graphics-laden, macro-and-formula-infested file I could find at it to see how it held up. Despite warning of conversion errors, Symphony handled the Dungeons & Dragons 4^th Edition multipage autocompleting character sheet with ease. No obvious function breakdowns or layout problems occurred.

When we used Symphony to create basic spreadsheets, all the standard formulary functions were present, and in fact the sidebar system proved useful in dealing with multiple commands at once. What isn't present are the SQL database hook-ins and pivot tables that MS Excel power users may depend on for heavy data-crunching. Symphony is a solid spreadsheet handler, but don't expect it to displace Excel for your custom uses.

Lotus Symphony Presentations

Symphony was decidedly schizophrenic when it came to presentations. It failed to properly convert our sample PowerPoint 2007 document, breaking some layers and graphs. That said, Symphony offered almost too many customization options when it came to building spreadsheets. A hefty clip-art library, multiple transitions, and 3D object generators were almost dizzying in their possibilities. For once, I think MS Office power users will; be comfortable with an alternate app, as there was little that PowerPoint can do (aside from Sharepoint hook-ins) that Symphony couldn't Except, of course, competently handle PowerPoint 2007 slideshows.

Conclusion

IBM Lotus Symphony is the ignored stepbrother of OpenOffice, in that both are free, traditional software alternatives to MS Office, but that OpenOffice is the one that has been embraced by the open source community. As such, it is OpenOffice that has the final shine and polish -- and template and extension support -- that Symphony lacks. Using Symphony is hardly a bad choice -- especially given the price tag -- but there's nothing Symphony does that OpenOffice doesn't do better. In the end, that's the worst criticism I can offer.

Pros

• Free
• Runs on Linux, Mac or Windows
• Feature-rich

Cons

• Lacks polish
• Limited file format support
• Poor third-party suppor