Patti Boulahanis, SFR

Broker, SFR

7 Tips for Keeping Your Financial Fitness Resolution

 

 


The new year is a great time to get yourself pointed in the
right direction financially. “Making small improvements at the beginning of the
year is a lot easier than trying to play catch-up,” says financial planner Rick
Rodgers, author of “The New Three-Legged Stool: A Tax Efficient Approach To
Retirement Planning.”

“Just as you would embark on an exercise program
to lose weight and get physically fit, there are simple steps you can take that
will lead to being financially healthy and fit.” Here are Rodgers’ seven tips
for improving your financial life in 2013.

Review your credit
report
- Borrowing money isn’t the only reason to check your credit.
Employers check credit reports and so do insurance companies. Your credit score
can have a profound effect on the amount you pay for auto and homeowners
insurance -- and perhaps on health and life insurance in the not-too-distant
future. Order your free credit report at AnnualCreditReport.com.


Set up an Automatic Savings Plan (ASP) - If your employer
doesn’t offer this through payroll deduction you can set one up through your
bank or brokerage account. Simply have a certain amount of money withdrawn from
your checking or savings account each month and deposited into your investment
account. That way, you save it before you ever have a chance to spend it. Try to
increase the amount you invest at least once a year.

Establish
a cash flow plan
– Business owners know you can’t control what you
don’t track. Take the time to forecast your income and expenses for the year,
and put it in writing. Then adjust those numbers to reach your goals, such as
paying down debt or replacing a car. Track your progress on a regular basis by
holding a monthly family finance meeting to review the plan.


Pay off your credit cards – It’s especially important to take
action on debt in 2013. Cash doesn’t earn much interest sitting in a deposit
account (less than 1 percent) and even “low interest” credit cards charge 10 to
12 percent. So if you're sitting on any extra savings, consider using it to pay
down credit card debt. Your cash flow plan should include a schedule to
eliminate credit card debt as quickly as possible.

Shop your
insurance
– Insurance agents are often paid commission based on premium
levels, so they have no incentive for finding existing customers lower premiums.
However, there is a huge incentive for a competing agent to find you the lowest
premium in order to win your business. Make note of the coverage levels you have
for your homeowner’s and auto policies and use them to comparison shop. Look at
ways to save on your health insurance coverage, too, such as switching to a
high-deductible plan and opening a Health Savings Account.


Write an estate plan – At a minimum you need to have a valid
will, power-of-attorney (POA) for your finances and health-care decisions, and a
living will (Advanced Healthcare Directive in some states). Decide who will be
your personal representative in the event you become incapacitated (POA) or at
your death (executor). If you have minor children, choose who will raise them in
your absence and establish a testamentary trust for their finances.


Meet with a financial adviser – An adviser is to financial
planning as a personal trainer is to an exercise program. Allow yourself to be
held accountable by a third party who will push you to help yourself. Good
advisers will help you develop a budget, look at your debts, tax situation,
retirement and college savings, estate planning and insurance. You don’t have to
be a high-net-worth individual to seek the assistance of a financial adviser. Go
to the National Association of Personal Financial Advisors (NAPFA) and search
for one in your area.

Don’t just make a vague resolution to save money.
According to Psychology Today, of the millions of American’s who make a New
Years resolution, 40 percent have already failed by Jan. 31. Let 2013 be the
year you make lasting changes to improve your financial life.

Certified
Financial Planner Rick Rodgers is president of Rodgers & Associates, “The
Retirement Specialists,” in Lancaster. For more information, visit www.RodgersSpeaks.com and www.TheNewThreeLeggedStool.com

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