This time of year people are focusing on getting in shape and following through on New Years’ resolutions. Maybe you got a new gym membership or are trying to cut down on junk food once and for all, but what about your financial fitness?
Here are key steps you can take to become more financially fit this year.
1. Record Your Starting Point
This can be the hardest part. Organizing your finances can be difficult, especially if you haven’t been keeping up with all of your financial documents the last few years, but knowing what you have to work with is a very important step on your road to financial fitness.
Soon, you’ll be getting in all of your year-end statements and that can be a great place to start to record what you have so far. These can become the baseline for your financial growth. If you find that you this step is too overwhelming or time consuming to do on your own, consider meeting with a financial advisor who can help you to get organized and put things in perspective.
2. Set Specific Goals
Setting goals helps us to stay focused and on track. Once you know what you have to work with, you can set your financial goals to help fill in the gaps. For example, if you know you need more in your savings to have a healthy emergency fund you can set a goal to make that happen this year.
We recommend being as specific as possible in your goal setting. Instead of just having a goal of saving more, perhaps your goal is to add $5,000 to your savings account.
3. Create a Plan and Write it Down
On that note, those goals won’t meet themselves. Once you know what you want to accomplish in order to get financially fit, it’s time to create a plan to make it happen.
Everyone’s plan will be different, but it can start with something as simple as a monthly budget where you allocate so much money to put towards retirement, your children or grandchildren’s education, etc. It can also mean working with a financial advisor to make sure that you are creating a plan that will help you work towards the lifestyle you deserve both now and throughout the rest of your life.
4. Monitor Your Performance
Just like getting in shape can be a trial and error of finding the right diet or exercise program that works for you, it may take some time to really get the hang of your financial fitness program as well. By monitoring your performance and making adjustments as needed, you can focus on working towards your goals and becoming financially fit this year.
This article was originally published on Jan. 6, 2018 in the Brainerd Dispatch.
Peg Chromy Webb has specialized in financial consulting for more than 30 years and is a popular co-host of the “Your Money” Radio Show. She is passionate about financial education and shares her expertise on career-building and financial literacy through various charitable endeavors.