The new year is when many people resolve to get back in physical shape. But it is also a great time to refocus on your financial fitness through new year financial planning.
Just as achieving your peak physical condition requires setting goals and building over time, financial fitness also requires starting with a goal and taking measurable steps over time to set yourself up for financial success.
In the gym, working with a coach can keep you on track toward your physical fitness. Similarly, new year financial planning with a financial advisory firm (such as Networth Advisors) can guide you along the road to financial fitness—starting with a consultation.
To begin the journey to building your financial health, here are steps you can take to gauge your current financial health and determine what to do next.
What Is Financial Fitness?
Financial fitness is managing your money so you are meeting your immediate needs and working toward financial goals.
Being financially fit allows you to:
- Manage your financial resources effectively
- Make informed financial decisions
- Maintain financial stability
You are financially fit if you clearly understand your income and expenses, consistently save for emergencies and retirement, pay your bills on time, maintain a healthy credit score, and regularly evaluate your financial position.
How to Gain Financial Fitness
Attaining financial fitness is a journey, and new year financial planning can put you on the right track. Consider these steps to building your financial fitness.
Set Financial Goals
To enjoy financial success, you must set goals, both short- and long-term.
You can set a short-term goal to build an emergency fund or pay down a high-interest debt. Your long-term goals may include saving to buy a house, providing for your child’s college education, or investing for your retirement.
Plan how to use your savings and investments and calculate how much you need over time to realize your financial goals.
Know Where Your Money Is Going
Tracking your spending is key to building a budget that supports your financial fitness. Your budget should include your necessities, all required expenses, any discretionary spending, and the savings and investments that progress toward your financial goals.
By tracking where your money is going, you can recognize where changes in spending habits can boost your financial fitness. Building a budget and sticking to it can keep your financial health on track.
Check Your Credit History Regularly
You can pull your credit report from the three major credit bureaus (Equifax, Experian, and TransUnion) each year. It’s critical to check your credit score and know whether the reports carry any inaccuracies or issues you may need to resolve.
While each person’s financial situation is different, your credit history and credit score play a major role in maintaining your financial health.
Put Your Finances on Autopilot
You can use direct deposit to send money straight into a savings account, and automatic bill pay can get your monthly bills paid on time. If you make automatic contributions to retirement and investment accounts, monitor the accounts to see that they are growing as you expect.
Calculate Your Net Worth
To get a picture of your financial health, calculate your net worth by subtracting your liabilities (debt) from your assets (savings and investments). This clear picture can deepen your understanding of your financial situation and allow you to make important decisions about your finances.
New year financial planning with a financial advisory firm, such as Networth Advisors, can help you with these steps and enhance your wealth management.
New Year Financial Planning Can Help Build Financial Fitness
Building and maintaining financial fitness allows you to take care of your needs and save toward your goals without excess stress. New year financial planning helps you kick off a new year with confidence about your financial situation.
At Networth Advisors, our primary focus is to take complicated retirement concerns and help to create simple solutions. Specializing in income planning and legacy preservation, we can guide you in creating strategies for your financial fitness and retirement. To schedule a meeting, call (800) 822-3639 or email schedule@networthadvisorsllc.com.
