Many people realize that the best way to stay in shape is to develop an appropriate fitness regimen and then stick with it. If you start a fitness program and drop out, you never give yourself a chance to become physically fit. In the long run, regular workouts pay off.
It is the same with fiscal conditioning. To develop fiscal fitness and the financial independence that goes along with it, be sure to adhere to a regular program of disciplined financial practices. Here are some tips to help you “shape up” your finances:
Set short-, medium-, and long-term financial goals.
With physical fitness, small accomplishments can lead to increased confidence. The same holds true for fiscal fitness. Set one-, three-, and ten-year financial goals and evaluate your progress regularly. Make adjustments, as appropriate, to achieve long-term financial independence.
Look for a savings “edge.”
Just as personal trainers are available to guide you at the gym and accelerate your progress, financial professionals are available to help you work towards vehicles that may facilitate savings. Contribute to an IRA, 401(k) plan, or other retirement plan for which you qualify that offers an edge: tax-deferred savings.
“Pump up” your savings.
Before spending your paycheck, put savings first. Earmark a set amount out of each paycheck for the future. Like regular repetitions at the gym, this habit can build financial muscle to help support you for the long term.
Trim high interest rates and finance charges.
Just as you trim excess fat from your diet, shop around for credit cards and loans with low rates. Pay off your credit card balances monthly to avoid high finance charges. If you need to carry a balance, try to only use cards with low interest rates.
Schedule periodic insurance and legal checkups.
Many people visit the doctor yearly for regular physical exams. Similarly, consider meeting with an insurance professional periodically to review and update your insurance needs. Also, schedule a regular review with your attorney to evaluate and update your will and trusts to accommodate any tax law changes.
Monitor your progress regularly.
To get in top physical shape, it's important to chart your progress. It can be very inspiring to look back at your progress and see how far you've come. It is also important to monitor your financial progress regularly and to meet, at least yearly, with a financial professional. This can help you pursue moving in the direction of your long-term goals.
By committing yourself to fiscal fitness, you are taking the first step toward pursuing financial independence. Remember, the sooner you begin, the better.
Your Financial Professional
One of biggest mistakes you can make is failing to create a plan to meet your goals – no matter what your goals might be.
- Trying to get in shape? Make a plan.
- Trying to save for college? Make a plan.
- Trying to run a 10k? Make a plan.
- Trying to retire when you're 65? Make a plan.
Benjamin Franklin once said, “If you fail to plan, you are planning to fail.”
Your financial professional can help you plan so you can work towards your goals.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
This article was prepared by FMeX.
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