by Edward Jones

Matthew North
Financial Advisor

It’s Super Bowl time again. And whether you’re a sports fan or not, you can probably learn something from the Super Bowl teams that you can apply to other endeavors — such as investing.
What might these lessons be? Take a look:
• Pick players carefully. Super Bowl teams don’t usually get there out of luck; they’ve made it in part because they have carefully chosen their players. And to potentially achieve success as an investor, you, too, need carefully chosen “players” — investments that are chosen for your individual situation.
• Choose a diversified mix of players. Not only do Super Bowl teams have good players, but they have good ones at many different positions — and these players tend to play well together. As an investor, you should own a variety of investments with different capabilities — such as stocks for growth and bonds for income — and your various investments should complement, rather than duplicate, one another. Strive to build a diversified portfolio containing investments appropriate for you situation, such as stocks, bonds, government securities, certificates of deposit (CDs) and other vehicles. Diversifying your holdings may help reduce the effects of market volatility. (Keep in mind, though, that diversification, by itself, can’t guarantee a profit or protect against loss.)
• Follow a “game plan.” Super Bowl teams are skilled at creating game plans designed to maximize their own strengths and exploit their opponents’ weaknesses. When you invest, you also can benefit from a game plan — a strategy to help you work toward your goals. This strategy may incorporate several elements, such as taking full advantage of your Individual Retirement Account (IRA) and your 401(k) or other employer-sponsored retirement plan, pursuing new investment opportunities as they arise and reviewing your portfolio regularly to make sure it’s still appropriate for your needs.
• Stay dedicated to your goals. Virtually all Super Bowl teams have had to overcome obstacles, such as injuries, bad weather and a tough schedule. But through persistence and a constant devotion to their ultimate goal, they persevere. As an investor, you’ll face some challenges, too, such as political and economic turmoil that can upset the financial markets. But if you own a diversified mix of quality investments and follow a long-term strategy that’s tailored to your objectives, time horizon and risk tolerance, you can keep moving forward, despite the “bumps in the road” that all investors face.
• Get good coaching. Super Bowl teams typically are well-coached, with disciplined head coaches and innovative offensive and defensive coordinators. When you’re trying to achieve many financial goals — such as a comfortable retirement, control over your investment taxes and a legacy to leave to your family — you, too, can benefit from strong “coaching.” As your “head coach,” you might choose a financial professional — someone who can help you identify your goals and recommend an appropriate investment strategy to help you work toward them. And your financial professional can coordinate activities with your other “coaches,” such as your tax and legal advisors.
Unless you’re a professional football player, you won’t ever experience what it’s like to play in the Super Bowl. However, achieving your financial goals can be a fairly big event in your life — and to help work toward that point, you can take a few tips from the teams that have made it to the Big Game.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

by Edward Jones

Matthew North
Financial Advisor

You’ve no doubt heard that “time is money.” While this expression may be applicable in many areas of life, it’s especially relevant for investors — because the more time you spend not investing, the less money you are likely to have when you really need it, such as during your retirement. That’s why it’s essential that you don’t wait to start saving for your days as a retiree.
Many people think it won’t make much difference if they delay investing for a few years. As you know, time flies, and before you know it, “a few years” turns into a decade — and a decade’s postponement in saving for retirement can make an enormous difference in your life.
How big a difference? Suppose you plan to retire at age 65. If at age 25, you began putting $200 a month into a tax-deferred vehicle, such as a traditional Individual Retirement Account (IRA), and your investments inside that IRA hypothetically earned on average 7 percent a year, you would accumulate about $512,000 after 40 years. However, if you had waited until you were age 30 to start saving for retirement, with all else being equal, you’d end up with only about $355,000 when you reached 65 — $157,000 less — due to that five-year delay. And if you waited 10 years, until you were 35, you’d end up with about $243,000 — far less than half of what you would have accumulated had you started saving at 25. (Keep in mind that you will eventually have to pay taxes on these accumulations, and the actual figures don’t reflect fees, commissions or expenses.)
Clearly, the cost of delay can be considerable — which is why you should consider taking these steps:
Develop a strategy with your financial advisor. It’s easier to stick to a strategy if you know where you’re going. Your financial advisor can help you determine how much you need to save to reach the type of retirement you’ve envisioned.
If you haven’t started saving, begin now. If you wait until you feel more financially comfortable before you invest for retirement, you may never begin. Even if you can put away only a small amount, such as $50 per month, you’ll have made a start.
To make it easier on yourself, set up your accounts to automatically move a set amount each month into your IRA. As the above examples show, the best way to build substantial savings is to start early, but even if you’re in your 30s or 40s, you can catch up — although you’ll need to save more to potentially get to the same level.
Increase your investments when your income rises. Every time you get a salary increase, boost your contributions to your IRA and your 401(k) or other employer-sponsored retirement plan.
Don’t take a “timeout” from investing. Keep on investing, whether the “news of the day” is positive or negative. The best investors are those who follow a consistent strategy and continue investing, year in and year out.
In short, save early, save often — and keep investing.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

by Edward Jones

Matthew North
Financial Advisor
While the election season heats up, you will hear more and more promises, claims and counter-claims from the candidates. As a citizen, you may or may not enjoy this “political theater,” but as an investor, you might be concerned over all the talk about taxes, Social Security, Medicare and other financial topics. Will you need to adjust your savings and investment strategies? If so, how?
Before you think about adjusting your investment strategy in anticipation of any actions coming from Washington, keep a couple of facts in mind. First, few campaign promises become reality. And second, due to our system of government, radical shifts in direction are difficult to implement — which is why so few of them occur.
Still, we may see some smaller-scale — yet not insignificant — changes in the near future. In light of this possibility, what investment decisions should you make? Here are a few suggestions:
• Consider owning investments that are taxed in different ways. No one can predict what will happen with income tax rates or the tax rates that are applied to capital gains and dividends. Consequently, it may be a good idea to seek “tax diversification” by owning investments that are taxed in different ways. For example, when you sell appreciated stocks, you pay capital gains taxes, whereas interest payments from bonds will be taxed at your individual tax rate. And it’s always a good idea to take advantage of tax-advantaged vehicles, such as an IRA and your 401(k) or other employer-sponsored retirement plan.
• Stick with quality. It’s a good idea, when owning stocks, to invest in quality companies with diversified businesses. These companies are usually less dependent on a particular government program, and they typically have a global reach, so they may be better able to handle any changes implemented in Washington.
• Stay focused on your long-term goals. Politicians come and go, and our political parties seem to take turns holding the reins of power. Yet your long-term goals — such as college for your children, a comfortable retirement and the ability to leave a legacy to your family — don’t really change. By realizing that you are largely responsible for achieving your goals, and by following an investment strategy that’s suitable for your individual risk tolerance and time horizon, you can make gradual, but still meaningful, progress toward those goals — no matter what’s happening in Washington.
• Review your strategy regularly. With the possible approach of changes in tax policies and in government programs that can affect your retirement security, you’ll want to review your investment strategy regularly to make sure it’s still on track toward helping you meet your objectives. As part of this review, you may want to seek out more “tax-smart” investment opportunities, while always looking for ways to supply the asset growth you’ll need to enjoy the retirement lifestyle you’ve envisioned.
Aside from voting for the candidates who best represent your interests, you may not have much influence over what goes on in Washington. But by “electing” the right moves to help meet your goals, you can have plenty of control over your investment strategy.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

by Edward Jones

Matthew North
Financial Advisor

If you’re of a certain age, the new year means you’re that much closer to a day you may have anticipated with a combination of humor and resignation — specifically, the day you’re eligible for Social Security. But just because you can take Social Security, it doesn’t mean you must take it. So, should you?
Before we get to that question, let’s review the basic rules governing Social Security payments. You can typically start collecting benefits at age 62, but you’ll get only about 75% of what you’d receive if you waited until your “full” retirement age, which varies according to your birth year but is most likely 66. You’ll get even bigger monthly checks if you delay collecting them until you’re past 66, and you’ll “max out” on your payments once you reach 70.
So, the question boils down to this: Should you start collecting Social Security early — thereby receiving smaller, but more numerous, checks — or later, when your checks will be bigger but fewer?
If you really need the money once you reach 62, you’ve already got your answer. But if you could potentially afford to wait, we recommend you view your decision through a LENS:
• L: Your projected lifespan —You can’t see into the future, but given your family history and general health, you can make an educated guess about your projected longevity. If you’re fairly confident that, once you reach 66, you’ve still got another two or more decades in front of you, you may want to consider delaying taking Social Security past age 62.
• E: Your employment status — If you’re under full retirement age — between 62 and 66 — then for every two dollars you earn over $14,640 (in 2012), you’ll lose one dollar in Social Security benefits. In the months before you reach your full retirement age, for every three dollars you earn over $38,880 (again, for 2012), you’ll lose one dollar in benefits. But starting in the month you reach your full retirement age, you can earn as much as you want without losing any benefits.
• N: Your need, including your other sources of retirement income — If you have a pension, or you’ve built substantial resources in your IRA, your 401(k) or other employer-sponsored retirement plan, and you can support your income needs with modest withdrawals from these accounts, you might decide it’s worthwhile to delay taking Social Security to maximize your benefits. Remember that regardless of your Social Security decision, you typically would have to pay a 10% early withdrawal penalty if you started taking withdrawals from these accounts before you reach age 59½.
• S: Your spouse/marital status — If you’re single, you basically just need to think of yourself when making this decision. But it’s a different story if you’re married. If you die first, your spouse can keep receiving his or her own Social Security benefit or receive yours — whichever is larger. Consequently, you and your spouse will want to coordinate when you take Social Security benefits so that you can maximize the benefit for the spouse likeliest to live longer.
The choice of when to start taking Social Security can affect your lifestyle throughout your retirement years — so weigh all the factors and make the choice that’s right for you.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

by Edward Jones

Matthew North
Financial Advisor

As an investor, you know that 2011 was a somewhat “choppy” year, with the financial markets going through many ups and downs. So what can you expect in 2012?
As baseball Hall of Famer Yogi Berra is quoted as saying: “It’s hard to make predictions — especially about the future.” And these words are certainly applicable for anyone who would like an accurate forecast of the investment climate.
Yet we do know of some factors that may affect your portfolio in the months ahead. Here are a few of them:
Strong business fundamentals — This past year, all the noise about the debt ceiling debate, the size of the U.S. deficit and the European financial situation tended to drown out some fairly good news: U.S. businesses’ balance sheets were strong for the most part, borrowing costs remained low, and corporate profits were good — and corporate profitability remains a key driver of stock prices. Heading into 2012, these fundamentals continue to look positive, which may bode well for investors.
Europe’s debt crisis — Greece’s economic problems made a lot of news in 2011, but they weren’t the end of the story in Europe, as major financial difficulties also face Italy, Spain, Portugal and Ireland. It’s by no means clear how these problems will be resolved, so don’t be surprised to see them lead to intermittent, if short-lived, shocks to the markets.
Election-year patterns — As you’re well aware, we’re voting for president in 2012. But you might be surprised to learn that the S&P 500 index has shown negative returns in only three of the last 21 presidential election years. Coincidence? No one can say for sure — and at this point, no one can say if this pattern of positive returns will continue during this election year. Still, it’s an interesting phenomenon. So there you have it: the good, the bad and the quirky. Take them all together, and you still may not be able to foresee what will happen with the markets this year, but you’ll have a lot to think about.
But instead of trying to predict what will happen in 2012, you may be better off following these tried-and-true investment strategies:
Diversify your holdings. By spreading your money among a wide range of investments, you can reduce the effects of volatility on your portfolio. Keep in mind, though, that diversification, by itself, can’t guarantee profits or protect against loss.
Don’t ignore your risk tolerance. If you worry excessively about market fluctuations, you may have too much risk in your portfolio, which means you may need to make some changes.
Always look at the “big picture.” Financial markets will always fluctuate. But if you can keep your focus on your long-term objectives, and make decisions accordingly, you can avoid overreacting to short-term events.
Like other years, 2012 will bring with it periods of both turbulence and smooth sailing. But by making the right investment moves, you can still chart a course that can allow you to move ever closer to your future goals.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Alaska’s commercial fisheries programs could get a slight boost if the Governor’s budget for the next fiscal year gets a nod from legislators. 
The proposed  FY2013 operating budget for the Alaska Department of Fish and Game, including all state and federal funds, is just over $209 million, a 5.1 percent increase. For commercial fisheries, the department’s most expensive unit, a budget of $70.5 million is a 4.4 percent increase. 
Gov. Parnell also is proposing a bond package that includes $10 million to help Seward prepare to homeport large at-sea processing boats owned by communities in the Kuskokwim region.  The vessels now are based in Seattle, and it could begin a transfer of other big boats to remain in Alaska year round.  
In the ADF&G budget, Commissioner Cora Campbell listed harvest management as a top budget item for fisheries. The report highlighted Yukon River salmon fisheries as a management priority due to its continued low productivity of Chinook.  Another is managing Southcentral region Chinook salmon fisheries in the face of low numbers of returning adults.  The state Board of Fish has designated seven king salmon “stocks of concern”, six in Northern Cook Inlet and one in Kodiak. 
The ADF&G budget report cites several fishery successes in the past year.   Managers achieved a huge milestone in rebuilding Alaska snow crab stocks to sustainable levels within a federally mandated 10 year time frame, while still providing a viable harvest. Also mentioned:  Alaska’s 2011 salmon harvest was the 3rd best since 1975; and the second best for groundfish in a decade. Click to the Fish and Game budget here.  
Prison trumps people -   Fish and Game will lose 59 staff positions under Governor Parnell’s proposed budget.  The commercial fisheries division will lose 13 full-time positions, and 46 part-time positions.
Of the 288 vacant, permanent state government positions to be cut, most are in three agencies. Health and Social Services at 65; ADF&G at 59; and the Dept. of Transportation would lose 58 jobs.
Deleted positions in other agencies range from 22 to zero within the university system, according to an Associated Press report. The AP said: “Parnell’s spokeswoman said most of the positions were vacant at least 11 months. The deleted posts are intended to help the state better absorb positions needed for a new prison.”
Future fishermen – Building future fishing leaders is the goal of the Alaska Young Fishermen’s Summit scheduled for mid February in Juneau. The Summit began in 2007 as a way to address the many changes the industry and the business of fishing have undergone in recent years. The two day event provides basic training on four fronts:   managing the financial aspects of a fishing business, participating in the regulatory   processes, Alaska’s role in the world seafood market  and  the science and management of  sustainable fisheries.
“It’s complicated — there are state managed fisheries, federally managed fisheries, hatcheries,   people are looking at more financing to get into the fisheries, and the global marketplace has changed,” said AYFS co-organizer Sunny Rice, a Sea Grant Marine Advisory agent in Petersburg.
Summit attendees will hear from fishermen who have participated in the political process, network with young and old fishing veterans, and mix with a wide range of industry experts – including Fish and Game Commissioner Cora Campbell, who will talk about “where and how a young fisherman can get involved.”  Fishermen also will see the Alaska legislature at work in Juneau.  
Nearly 200 fishermen have taken part in the AYFS so far and Rice said one thing is for sure — young people are eager for a fishing career.  
“I’ve seen an exciting uptick of young people wanting to get into the fisheries and they are coming at it with a cool perspective,” she said. “They think it is exciting and they are really dedicated to all the things that go along with it. It’s not just because it’s the closest job nearby that can make them some money.”   
The AYFS is set for Feb 13-14 in Juneau. Some travel scholarships are available, as are Alaska Airlines discounted constituent fares.  Rice cautioned that lodging in Juneau is really tight. Register by January 12 to reserve a hotel room at a special rate. Contact Sunny Rice at sunny.rice@alaska.edu or 907-772-3381              http://seagrant.uaf.edu/map/
 
Christmas sea miracles
As we reflect on the reason for the season, let’s not overlook the wonders of the deep.  Sponge Bob, for example, could be the next rage in fiber optics. Researchers at Bell Labs have found that a certain type of sponge grows a network of glass fibers far more advanced than any found in today’s telecommunications networks. 
New Zealand researchers have found that adding fish oil to animal feed reduces the release of methane gas by   sheep by 25 to 40 percent.  Over 20 percent of global methane emissions comes from farm animals.  
For hundreds of years Asian cultures have used jellyfish to treat arthritis, high blood pressure and back pain. Some jellyfish have a special bio-luminescence that is useful in medical research.  
Chitin, a substance found in the shells of crab, shrimp and other crustaceans, is packed with medical miracles. The carbohydrate that makes up chitin bonds with red blood cells to form an artificial clot  and seals massive bleeding wounds in just 30 seconds. The shrimp based bandages are   being used by our troops in Afghanistan. 
Russian researchers have created a product from enzymes in king crab shells that helps heal severe burns.  They claim that sea urchin pigment is remarkable for its anti-oxidant, anti-bacterial and anti-inflammatory properties. 
The venom of the cone snail is being used to treat severe chronic pain that doesn’t respond to other treatment. Just a few micrograms is said to be one thousand times more potent than morphine. Close to 15 drugs derived from marine organisms are in various stages of testing for cancer treatments. The lowly sea squirt appears to be especially promising.

by Edward Jones

Matthew North
Financial Advisor

Once again, it’s time to make some New Year’s resolutions. This year, in addition to hitting the gym, learning that second language and getting better organized, why not also consider a few financial resolutions?
What types of resolutions might you consider? Here are a few suggestions:
• Contribute more to your retirement accounts. The new year means that you are one year closer to retirement. To help yourself build resources for the lifestyle you’ve envisioned as a retiree, try to boost your contributions to your 401(k) or other employer-sponsored retirement plan. You can do this if you get a salary increase and devote at least part of it to your 401(k). At the same time, try to “max out” on your Individual Retirement Account (IRA). For 2012, you can contribute up to $5,000 to an IRA, or $6,000 if you’re 50 or older.
• Reduce your debts. Look for ways to cut down or consolidate your debts. It may not be easy, but it’s worth the effort because the lower your debt load, the more money you’ll have available to invest for the future.
• Build an emergency fund. If you don’t already have an emergency fund containing between six and 12 months’ worth of living expenses, start building one soon. Keep the money in a liquid vehicle — one that’s separate from your everyday checking and savings accounts. Without such an emergency fund, you may be forced to dip into your long-term investments to pay for unexpected costs, such as a major car repair, a new furnace or a large medical bill.
• Don’t overreact to volatility. In 2011, the financial markets have been volatile, with big gains followed by big drops followed by big gains — a true roller-coaster pattern. Try not to let large, short-term price movements influence your investment decisions. Many of the factors that cause jumps or declines are not that relevant to long-term results — and as an investor, you want to focus on the long term. Concentrate on building a portfolio that’s suitable for your individual goals and risk tolerance.
• Be aware of different types of risk. For many investors, “investment risk” strictly means the possibility of losing principal when the value of an investment drops. Consequently, to cut back on their risk in the face of a volatile market, they may sell off stocks and load up on certificates of deposit (CDs), bonds and other so-called “safer” investments. But each investment actually carries its own type of risk. For example, if you own CDs that pay a 2 percent return, and the inflation rate is 3 percent, you will lose purchasing power over time. And if you wanted to sell your bonds before they had matured, you’d have to sell them at a discount if the market interest rate had risen above the “coupon” rate of your bond because no one would pay you full price for them. Just be aware that no investment is “risk-free,” and try to build a diversified portfolio that can lessen the impact of one specific type of risk.
By following these suggestions, you can go a long way toward making 2012 a good year in which to make progress toward your important financial goals. So plan ahead — and make the right moves.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

by Edward Jones

Matthew North
Financial Advisor

You can’t predict how long you’ll live. Nonetheless, you still need to consider longevity as a key factor in creating, and following, a long-term investment strategy.
And your projected lifespan may be longer than you had thought. Men who turned 65 in 2010 can expect to live another 18.6 years, while women who reached 65 that same year can anticipate another 20.7 years, according to the 2011 Social Security Trustees Report. And these figures are just averages; depending on your health and family history of longevity, you could well spend two, or even three, decades in retirement.
Possibly because people are now realizing they may have to support themselves for far longer than earlier generations did, they seem to be growing increasingly concerned about running out of money in their later years. In fact, in a poll of people ages 44 to 75, sponsored by Allianz Life Insurance, 61 percent said they fear depleting their assets more than they fear dying.
So, if you’re concerned about outliving your resources — or if you think that you may become one of those people — what steps should you take, both now and during your retirement? Here are a few ideas:
Keep investing. Put away as much money as you can afford for your retirement. Take advantage of tax-deferred accounts, such as your 401(k) and traditional IRA, or tax-free accounts, such as a Roth IRA. (Roth IRA earnings are tax-free provided you’ve had your account at least five years and you don’t start taking withdrawals until you’re at least 59-1/2.) And keep investing, year in and year out, despite the inevitable market volatility you’ll encounter along the way.
Re-assess your retirement age. If you enjoy your work, you might consider staying at your job a few years later than originally intended. Those extra years of income, not to mention extra contributions to your 401(k) and potentially bigger Social Security payouts, can make a big difference to your retirement lifestyle.
Delay taking Social Security. As the laws now stand, you can start taking Social Security as young as 62, but your monthly checks will be bigger when you reach your “full” retirement age. You’ll get your biggest monthly Social Security checks if you wait until age 70, when they “max out,” but many people feel that waiting that long may not be worth it, when weighing the lost years of any payments against the unknown variable of life expectancy.
Calculate your “withdrawal rate.” Once you retire, it’s essential that you know how much can withdraw each year from your investments without running out of money. Your withdrawal rate depends on a variety of factors, including your age, size of portfolio, risk tolerance and retirement lifestyle. A financial professional can help you calculate your initial withdrawal rate and adjust it as time goes on.
The possibility of outliving your resources is not a pleasant thought. But by taking the steps described above, as well as others, you can go a long way toward taking the fear out of longevity, leaving you free to fully enjoy an active retirement.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

by Edward Jones

Matthew North
Financial Advisor

To participate in the spirit of the holiday season, you may be thinking of making some charitable gifts. If so, you’ll no doubt enjoy helping a group that does valuable work.
But to begin with, it’s important to understand just how necessary your gifts are to the country’s social fabric. Given the effects of the Great Recession and the slow recovery, it’s not surprising to learn that charitable giving fell a combined 13% in 2008 and 2009, after adjusting for inflation, according to The Center on Philanthropy at Indiana University. And although 2010 giving increased by 2.1%, again adjusted for inflation, many groups are seeing tough times as 2011 comes to a close. So your gift counts.
And it can count for you, too. By contributing to a qualified tax-exempt organization [e.g., a charitable group that has received 501(c)(3) status from the IRS], you may earn valuable tax deductions. This is true whether you give cash or another type of asset, such as stocks or real estate. And you may be able to get further tax benefits if the noncash asset you’ve donated has appreciated in value since you purchased it.
Making charitable gifts now may help you reduce your taxable estate. As you may know, the estate tax exemption level has fluctuated in recent years, so it’s hard for any of us to say for sure that we won’t be subjecting our estates to these taxes. However, that doesn’t mean you can’t take steps now to plan for possible future estate taxes.
One such step might involve establishing a charitable remainder trust. Under this arrangement, you’d place some assets, such as stocks or real estate, in a trust, which could then use the assets to pay you an income stream over a certain period of time. When you establish the trust, you may be able to receive tax benefits based on the amount the charity is likely to ultimately receive, the charitable group’s so-called “remainder interest.” Upon its termination, the trust would relinquish the remaining assets to the charitable organization you’ve named. Keep in mind, though, that this type of trust can be complex; to establish one, you’ll need to work with your qualified tax advisor and estate-planning attorney.
Another popular contribution vehicle is the “donor-advised fund.” Here’s how it works: You give cash or appreciated securities to the donor-advised fund, with the expectation of receiving a tax deduction for the contribution in that same year. You recommend which charities are to benefit from the contributions to the fund, and the fund invests and manages your contribution, along with the other assets in the fund. Again, you’ll need to consult with your qualified tax advisor before establishing a donor-advised fund to help ensure you obtain any expected tax benefits.
As we’ve seen, you can follow different charitable giving strategies. But however you choose to make charitable gifts, you can take satisfaction in helping worthy organizations while possibly improving your own tax picture.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

by Edward Jones

Matthew North
Financial Advisor

As you know, the holiday season can be joyous, hectic, celebratory — and expensive. And while you certainly enjoy hosting family gatherings and giving presents to your loved ones, you’ll find these things even more pleasurable if they don’t add a lot more weight to your debt load. And that’s why you’ll want to follow some smart money-management techniques over the next few weeks.
To begin with, try to establish realistic budgets for both your entertaining and your gift giving. When you host family and friends, don’t go overboard on your expenditures. Your guests will still appreciate your efforts, which, with a little creativity, can create a welcoming and fun experience for everyone. As a guiding principal, keep in mind these words attributed to Johann Wolfgang von Goethe, the famous German poet and philosopher: “What you can do without, do without.” Set a budget and stick to it.
And the same rule applies to your gifting. You don’t need to find the most expensive presents, or overwhelm recipients with the sheer volume of your gifts. This is especially true if you, like so many people, have been affected by the tough economy. Everyone you know will understand that gifts don’t have to be lavish to be meaningful.
Furthermore, by sticking to a budget, you won’t be tempted to dip into your long-term investments to pay for fabulous parties or mountains of gifts. It’s never a good idea to tap long-term investments for short-term needs, but can be especially bad when your investment prices are down, as they may well be this year.
So, if you want to stick to a budget but you don’t want to raid your investments, how can you pay for your holiday season expenses? If you can spread out your purchases, you may be able to pay for them from your normal cash flow. But if that’s not possible, you might want to consider “plastic” — your credit card. Using your credit card does not, by itself, need to amount to a financial setback, especially if you’ve chosen a card that offers favorable terms and you’ve already shown the discipline not to over-use that card. Just try to minimize your credit card usage over the holidays and pay off your card as soon as you can.
Of course, you can make your holiday season much easier, financially speaking, if you’ve set up a holiday fund to cover your various expenses. While it’s too late to set up such a fund this year, why not get an early start on the 2012 holiday season? All you need to do is put away some money each month into an easily accessible account, separate from your everyday accounts. You don’t have to put in a great deal, but you do need to be consistent, which is why you may want to have the money moved automatically, once a month, from your checking or savings account to your holiday fund. When next year’s holiday season rolls around, you might be pleasantly surprised by how much you’ve accumulated.
But for now, following some common-sense money management practices can help you get through the holiday season in financial shape — and that type of result can get your new year off to a positive start.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.