Your new year’s resolutions are probably well underway. Good for you to set and stick with your goals. While your focus may be to get more physically fit, it is also important to consider your financial fitness in 2019. Living in Orange County, or anyplace in the U.S., is increasingly challenging, especially for those in or nearing retirement. Take stock of what you're spending and ask: Do i NEED or WANT this item? If i walk away and NOT buy it, will it affect my life, negatively? If your finances are not where you want them to be, or maybe they are in need of a little tune-up, consider the six tips below to get your financial health fit this year as well.
1. Trim the Fat
It just makes sense that one of the first steps toward a more healthy financial future is spending less. Take a hard look at your budget, and odds are you can find some excess that you can easily trim off without feeling the pinch. Some experts recommend keeping a Spending Diary so you can track what you're spending, where and why. Try it and see what can be cut.
Start with looking at your spending on clothing, groceries and entertainment and see if smart shopping or more date nights at home can help free up some extra money each month. Shop in your closet and see what treasures you can wear or update. Next, look at your utility bills and find ways that can reduce them. As one of our clients just pointed out to me, GROW those grape tomatoes we enjoy so much instead of buying them each week from Costco.
Start with your non-essentials, such as cable and phone. Do you really need the extra movie channels and data? When was the last time you shopped around to price compare? Finally, discipline yourself to follow good energy saving tips to reduce the overall cost of your energy bills.
2. Tone Up Your Debt
Odds are the holidays increased your credit card bills, and you may be paying them off months later. Don't let that debt snowball higher than it needs to with accruing interest. Start with your highest interest rate card and set a larger payment in your budget to begin lessening that total. Once it is paid off, use that same payment to start tackling your next high-interest debt ball and so on. A critical thing to remember is that when paying only your minimum payment, it will take you 10 years and a significant amount of interest to pay off your card so always pay more than the minimum if you are looking to pay off debt.
3. Whip Your Credit into Shape
Your credit score can affect you in many aspects of your financial life. Whether you are looking to buy a house, a car, or to take out a loan to start a business, your credit score will be used to determine how much interest you will pay and how likely you are to even get your funds. Unfortunately, many people neglect their score until they need it, and at that point, it can be difficult to improve in enough time. Keep your credit card balance far from the limits, be sure to make payments on time, and monitor your credit score for negative marks.
4. Load Up of Savings
Once you have trimmed the fat off your budget, you will want to put some of that into savings. One thing to start saving for immediately is an emergency fund. Surprise repairs, medical bills, and layoffs can damage your financial health if you aren’t prepared for them. Having this fund available for these times can lessen the blow and help you stay on top of your bills, so you don't fall behind. And help you sleep better at night.
5. Put Retirement Savings in Your Routine
Saving for retirement is critical so that you can retire. Many people do not save enough for their retirement or wait so long that it stresses their budget to meet their goals. Make it a point this year to focus on your retirement goals and find extra funds that you can put into your account so that it has the necessary time to grow as it should. If your company matches contributions, sign up and take that money. It's FREE money. Try to match your employer's contribution as much as possible.
And, if you’re no long with your last employer, your 401(k) shouldn't be there either. Talk to your financial adviser Bob Lawrence (714-368-7494) about your investment options and make sure your money is working for you.
6. Start a New Investing Routine
Investing may be one of the quickest ways to grow your wealth, but many people avoid entering the world of investing because they’re afraid of losing their money. There can be risk in investing. Other people are under the misconception that you have to invest a lot of money when the truth is you can start small. The secret is: Start the process of saving.
When you're ready to invest, meet with your financial adviser Bob Lawrence (714-368-7494) who can help you pick a mix of funds based on your risk tolerance. We’re a fiduciary, which means we do what's right for you, the client, first and foremost. Our firm, Financial Strategies - Wealth Management Group, is a registered investment advisery firm with access to the full range of investments and tax-advantaged plans, from stocks and bonds to Deferred Sales Trusts to colored gemstones and more.
Get your finances healthy this year and set attainable goals to help you grow your wealth and get started on a secure financial future. Enjoy today and be extraordinary every day -- Stephanie Lawrence
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.