Financial Fitness: Challenge Yourself

This New Year, legions of people will pledge to overhaul their lives by eating right, exercising regularly, learning new job skills and more. What you don’t hear a lot about are people who make the ultimate New Year’s resolution — to organize every aspect of their financial lives.

We’ve organized the steps everyone needs to take to help get their financial lives in peak condition. It’s not so hard when you take it one step each month. We are here to help coach you through each monthly challenge.

January - ASSESS

You might work with a nutritionist to eat better, a trainer to get in shape and a mentor to learn new job skills. Why not work with a financial professional to assess your current financial situation and the work ahead of you?

February - PLAN

Write down your short-term goals. Marriage or a first home? And then intermediate goals – maybe a bigger home or a child’s college costs. Next, ask yourself what you want to achieve 25 or 30 years from now. A comfortable retirement? Leaving loved ones a financial legacy?

March - BUDGET

Now figure out a financial path to achieve your goals. Start with a budget. Add your debts and income sources separately. Subtract your debt from income to get disposable income. Then make a budget and stick to it.

April - REDUCE

As spring arrives, spring into action by preparing to better your current finances. Cut your debt where possible, particularly high-interest revolving credit. Add to your income, especially if you have a skill that lends itself to part-time work.

May - SAVE

Put the money you save from reducing debt and earn from side jobs, raises and bonuses into accounts designated for each goal. Never forget that you cannot borrow for retirement, so this long-term savings goal should be a priority.

June - PROTECT

You don’t think twice about protecting the value of your home and car with insurance. Why not do the same for your income? Buy life insurance* to protect your loved ones financially and disability income insurance to protect your earning power in the event a long-term disability prevents you from working.

July - INVEST

Put your money where it can help you best meet particular goals. Understand what you invest in. Take advantage of investment options that offer tax benefits.

August - RETIRE

The steps you take now will influence your financial readiness in retirement. Don’t put off saving for this important goal because using time to your advantage may help your money grow. And don’t forget to contribute at least whatever your employer matches to your 401(k) plan.

September - GRADUATE

This will probably come before retirement, but remember that while you can always borrow for a child’s college expenses, you can’t for your retirement. Use the tax advantages of 529 plans and Coverdell Education Savings Accounts to save specifically for school costs.

October - ENROLL

This is the time of year to review and select the benefits your employer offers during open enrollment. Check out life, health and disability insurance offerings, as well as any retirement plan.

November - GIVE

Contribute to charitable organizations. It feels good and you may get tax advantages for it. Also, you can benefit loved ones with an annual gifting strategy during your lifetime.

December - REVIEW

Life happens. For example, your priorities might change and insurance needs generally change with age. Make sure to review your financial strategy regularly with your financial and tax professionals.

*Applications for life insurance are subject to underwriting. No insurance coverage exists unless a policy is issued and the required premium to put in force is paid.