We all focus on resolutions to address our health issues. This year, why not improve your financial health? After the tumultuous past few years in the job and stock markets, now is a perfect time to reassess and address your fiscal fitness. After the holidays, our bodies are a bit fat and our accounts are a bit thin. This is the perfect time to look at the year ahead and map out a tight plan.
1.Determine your fiscal fitness level. Before starting any new exercise plan, everyone from couch potatoes to Olympic athletes start by assessing their current level of fitness. Your fiscal fitness plan shouldn’t be any different. How strong is your bank account? How flexible is your portfolio? How overweight are your loans? Just like working out, these exercises can be painful at first, but incredibly necessary. You know the adage: Just do it! And do it now. Ignoring it won’t make it any better.
2. Size does matter. Think about your largest loans and highest interest rates first. This is especially true of vanity credit cards such as those offered through department stores. The tempting part of these cards is that they typically offer you a big discount on your first purchase. But after that, they rarely show you the love! Remember that small amounts of debt spread across numerous cards at the highest rates are always worse than that single amount on a single card at a very low rate.
3. Every little bit counts. In many cases, well-intentioned resolutions are forgotten a few weeks into the year. Be realistic in your goals and make a plan that you know you can keep. Start small with manageable goals. Just like athletes who begin training for a marathon will start by running 5Ks and adding miles, figure out what your proverbial financial marathon will be and make some small steps to get you there.
4.Celebrate your successes. Athletes have clear markers and finish lines to prove how well they are achieving their goals. Set your eye on the finish line for each of your fiscal goals, too! Once you have paid off your highest credit card balance or have gone three months making regular contributions to your retirement account, celebrate in a meaningful way. Choose something that won’t put you back in the same predicament. Old school: Put a jar on your dresser and fill it with $1 a day, then treat yourself to a new pair of running shoes.
5.Buddy up. Just like in the gym, where it is best to have someone spot you, or on the trail, where it is nice to have a running partner, your financial goals will be easier to achieve with a partner. Find someone you trust and make him or her your accountability partner. Share your goals and find ways and times that you can have check-ins on your progress. More importantly, your fiscal fitness partner needs to be someone whom you are often around and can talk you down from that shopping bender! And if sharing with a person is too scary, find a virtual partner. In past columns, we have discussed different financial software packages that can help you track your progress and goals. Find one that works for you and stick with it. Just do it.
Story by Lynn Yeldell
L Style G Style – Storyteller of the Austin LBGT Community.
#GetToKnowUs
