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Cutting debt is a priority for many in 2011
Everything starts with a budget says an accounting firm partner
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When it comes to 2011 New Year's resolutions, many people are pointing to the goals that hit them in the pockets.

Local accountants are seeing Hall County residents put more emphasis on paying down their debt, contributing to their savings and retirement plans or working on their credit scores.

To get started, everything starts with a budget, said Ron Bracewell, managing partner for Bates, Carter and Co. accounting firm in Gainesville.

"A budget is a well-considered financial plan and without a plan, you'll never know where you are going or when you get there," he said. "The budget should consider your income and your obligations and needs, both short-term and long-term. I believe part of those obligations include your charitable and religious commitments, and they also include your debt obligations."

People again are identifying the difference between need and greed in their budgets and giving up big ticket items and long vacation trips, said Shelagh Braley, chief operating officer of, a social network for goal-setters with more than 10,000 members.

"The major recession-related trend we've noted isn't smaller goals as we anticipated," she said. "What we found are more people are using the site's tools for practical planning, including budgeting and setting aside a longer preparation time to make their achievements happen."

Residents are delving more into the nuances of their finances by purchasing technology to help them investigate the numbers or by asking detailed questions to decide how to get out of debt sooner.

"Your budget should be designed to amortize your debt in a manageable fashion. For residential debt, 30 years is the maximum and 15-20 years is ideal," Bracewell said.

"Investment debt incurred through real estate and business purchases should be amortized in the 5-15 year timeframe. Debt is retired with future income, so it is important to project what that income will be in order to assess whether you can retire the debt comfortably."

Parents are also working with middle school and high school students to set financial goals, such as preparing a budget for the first time or learning what it takes to create good credit.

"Now is a good time for high school students who are preparing to go off to college to sit down and consider what their budget is going to be and how to maintain it," said Rebecca Stoll, Georgia's Junior Achievement senior manager of marketing. "It becomes more tempting to spend your money when you go off to college."

In a poll of 1,000 teens conducted by Junior Achievement and the Allstate Foundation, about 74 percent said they should have a credit card by age 21.

However, more than half said they weren't sure how to effectively use credit, and 25 percent said they didn't budget their money. Those surveyed also said they don't have crucial money management skills, and 83 percent said they wished they had learned financial basics before they graduated high school.

"One thing we recommend across the board is setting aside 10 percent for yourself. Automatically put a part of whatever you earn into savings and make that a habit early on," she said. "Once that's instilled, you are able to make a budget on what's left. It's useful if you have a savings goal, such as buying a car, but it's also a good habit to get into whether or not you have a savings goal."