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
“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
• 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of money withdrawn from your checking or savings account each month and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
• 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
• 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. Visit
the National Association of Personal Financial Advisors (NAPFA) online 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 Year’s resolution, 40 percent have already failed by Jan. 31. Let 2013 be
the year you make lasting changes to improve your financial
Certified Financial Planner Rick Rodgers is president of Rodgers
& Associates, “The Retirement Specialists,” in Lancaster, Pa. He’s a
Certified Retirement Counselor and member of the National Association of
Personal Financial Advisers.
For more information, visit www.RodgersSpeaks.com.