10 steps toward financial fitness

The first and most important step toward financial health is education. All other steps follow that one.

As retirement options become increasingly sophisticated, fine print consequently more lengthy, and pensions decidedly rare, investors need to work harder to understand the impact of the important choices they make.

Fortunately, access to quality financial education has improved. Podcasts, blogs, books, seminars and financial education classes all offer plenty of valuable information, most literally available at your fingertips. Of course, you need to check your sources and be leery of sales pitches, but that still leaves a wide variety of legitimate options.

Winch Financial offers financial classes in several locations through the University of Wisconsin continuing education system and, while we cover the information in our syllabus, we also tailor each class to its participants because finances are personal and everyone’s risk/reward profile is unique. We also send out a weekly commentary, which not only covers what happens in the stock market each week, but also offers some explanations behind the moves.

Many of us subscribe to a variety of financial podcasts. We also follow Dave Ramsey and have taken his Financial Peace University course. If you do one thing for your retirement this year, we urge you to educate yourself.

That education is going to lead to other tasks, so here are a few more steps you can take to get financially fit this year:

  • Track you expenses. This may seem like a tedious task (because it is), but you can make it easier by making it part of your daily routine. Digital banking has made it easier to categorize expenses and we find that seeing where your money goes makes you much more intentional about your spending.
  • Once you’ve tracked your expenses for a few months, you can set a realistic budget pretty easily. Random budgets waste time. The best budgets develop from your own spending habits.
  • Change your passwords. This is the best way to stay ahead of hackers. It may be easier in the short run to keep the same password for years and use it for all of your accounts, but it’s not worth the risk.
  • Claim your Social Security Profile on ssa.gov. If you don’t do it, someone else might in a bid to steal your identity. Create a login and password and check in at least annually.
  • Max out your employer sponsored retirement account. Depending on your job, this could be your 401(k), 403(b),457, Simple or SEP plan. If your employer offers a matching program, make sure you take full advantage of it. Pay attention to the fees inside these accounts and the way they are managed. Remember, even though you can’t access it until you reach full retirement age, it’s still your money. Make sure you’re comfortable with the way it’s invested.
  • Check your beneficiary designation forms. Make sure your policies and accounts are set up to be distributed the way you intend. These forms supersede any verbal agreements so keep them up to date!
  • Be vigilant about financial scams. Never give out your personal information, either on-line or via telephone. No government agency or private financial institution will ever call you to solicit personal information, nor will they ask for passwords to your private accounts.
  • Work with an advisor you trust, preferably one with a fiduciary responsibility to you.
  • Reward yourself for your good habits. Financial fitness takes discipline, so make sure you work a few treats into that budget to reward yourself for a job well done.

Note: You’ll find links to register for our current classes on the bottom right corner of our home page.