Six Principles for Financial Fitness
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“An investment in knowledge pays the best interest.”—Benjamin Franklin.
1. Set goals.
If you don’t have concrete short-term and long-term financial goals, reaching some level of financial fitness can become much more difficult. Simply put, if you don’t have a destination. You are financially adrift.
Short-term goals you might consider:
- Establishing three to six months of cash in an emergency fund
- Saving for a down payment on a home or auto
- Saving for a vacation
Long-term goals:
- College savings for your kids and retirement savings.
2. Determine your income buckets.
How do you spend your income? You will only have a holistic picture if you are tracking expenditures.
You might be surprised at how much you spend on eating out, on entertainment, and even on a daily habit of barista-prepared lattes.
When you accomplish shorter-term goals, reward yourself. It need not be extravagant, but accomplishments should be celebrated. Trim frivolous spending where you can but leave some room for fun.
3. Your lifestyle shouldn’t exceed your income.
Excessive spending is not a path that leads to financial fitness. You want economic space in your life. You want ”money at the end of the month,” not ”month at the end of your money.” A budget is your blueprint that helps achieve this goal.
4. Invest wisely.
Among various factors, your shorter and longer term financial goals will greatly influence the proper mix of investments. A diversified portfolio that crosses the spectrum can reduce risk and enhance your return over the long run.
In other words, diversify.
We are here to assist you with that. Our recommendations are tailored to your financial goals and your unique circumstances.
Accumulation of wealth over a more extended period is our goal. It should be yours, too.
5. Enjoy your retirement.
Many enter retirement after accumulating wealth over decades. They have learned how to save. For some, suddenly relying on that savings rather than earning income from labor seems like a daunting leap they may need to prepare to make. It doesn’t have to be that way. This is your time to enjoy what you’ve worked so hard for. While it’s essential to ensure you’ve adequately allocated income for your retirement, it’s equally important to allow yourself the freedom to enjoy it.
6. Protect your assets.
Do you have life insurance, health insurance, and personal liability insurance? Do you have a will and estate plan? Who are your beneficiaries? What happens if you become disabled?
History has shown how important it is to build our homes on a solid financial foundation. So, when the rains come and the winds blow (and they will), the house and foundation are designed to withstand the financial storms.
Having said all that, we are always here to assist you along the way.
Tracking #-05365896
Original Source: Horsesmouth