Financial Fitness: How To Stay On Track

Financial-Fitness

Keeping your finances on track isn’t always easy, especially if you have a family or past debts such as student loans. It can be difficult to make sure your money is going to the right places every month; many families have to make tough decisions about whether they can spend money on entertainment or pay the bills on time, while others owe so much to credit card companies that they can barely stay afloat.

Staying financially fit is a hard job made even more difficult by the fact that the cost of living doesn’t always line up with our salaries. Thinking about planning for your kids’ futures–and for your own retirement–can be incredibly stressful, and can even lead to depression. Learning how to stay on track when it comes to how much you’re spending and saving can be really beneficial in so many ways; keep reading for some great tips on how to get started.

 

List your debts

You probably have a good idea of where your debt lies; for many people, it’s mostly credit cards and student loans. However, you may be surprised after listing each debt and the amount owed on a piece of paper. Having a general idea of your finances and seeing them in front of you are two very different things, and it’s important to have a good handle on everything you owe, from department store credit cards to medical bills.

 

Create a budget

Creating a budget is always a little harder than it sounds, especially if you have a large family. The best way to get started is to look at your monthly expenditures first; go through your checking account and look for recurring charges. Add up everything you spend in a month and compare it to your income, then look for ways you can save money on each of those items. Gas, for instance, can be a huge expense if you live far away from work or have to shuttle the kids to and from school and activities. Carpooling, using public transportation, and riding a bike are all great ways to save money there (and they are much better for the environment). If you enjoy eating out often, cut back by taking your lunch to work or school, and maybe save one night a week for a dinner splurge.

 

Set a goal

It can be really easy to keep spending the way you have been if you don’t have a goal set. What is the most important financial goal for you? If it’s saving for your child’s college fund or buying a new house, start a savings account specifically with that in mind. Be realistic when setting your goal, and look at your budget to see how much you can sock away each payday without it affecting you negatively for the month.

 

Look at life insurance

No one wants to imagine that one day they won’t be with their families, but making sure you have a great life insurance policy can factor into your financial wellness and sustain your loved ones even after you’re gone. Not only that, you can sell it to help pay for your retirement down the road if that becomes necessary and if your life insurance policy is no longer beneficial to you or your loved ones.

Staying on track financially takes some work, but there are ways to do it without creating stress and heartache for you and your family. A good plan can go a long way, so talk to a financial advisor to figure out the best ways to save and make responsible decisions.

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Financial Freedom for Older Adults

Financial Freedom wooden sign with a beach on backgroundThe word “financial” is not often followed by the word “freedom,” and yet financial freedom has never been more possible. With the advent of online money-making platforms, the constant influx of new products that yield substantial returns, and the continuous stream of budgeting ideology that floods the marketplace, we should be one of the most financially sustainable generations in history. The missing key for unlocking this possibility is very easily just an understanding that we aren’t supposed to be led by our money- we are supposed to be in charge of it.

So what can you do differently to make sure that you have the say over what happens with your money and that your future is financially secure? There is always something you can do to improve in every area of life, especially in money management.

If retirement is on the horizon, make sure you have all of your real estate ducks in a row. Do your best to have your mortgage paid off before you retire to avoid having a payment to contend with when you’re no longer working. If you have successfully decluttered as your children have grown and as your interests have changed, it may become clear that your house no longer fits your needs. If it’s time to downsize, you open up more opportunity to save: by selling your home and moving into a smaller house, you can pad your savings with extra money to help with assisted living or medical costs down the road. Or you could add some real estate to your investment portfolio. Maybe it’s time to get the vacation home you’ve been eyeing — you can always offset payments by renting it out when you aren’t using it.

Next, consider your budget. Unfortunately, only a third of the American population admits to keeping some type of budget for their income. For those keeping score at home, that means two thirds of Americans don’t layout or maintain a plan for their finances. The point is simply that if you aren’t sure where your money belongs on daily basis, it will be harder to plan for the future.

Have you ever taken a road trip to a new vacation spot without a map or a GPS? Having a plan makes all the difference in whether you successfully arrive to your destination. A budget is a plan of action, meant to navigate you through your future. You can start the easy way, by separating your finances into three categories: money for charities, money to save, and money to spend. Once you have determined the percentage of your income that belongs in those major categories, you can break it down further and be as detailed as necessary. There are several ideas behind budgeting worth considering, and you can use the one that best fits your lifestyle.

Before you know it, budgeting will become second nature and you won’t have to question where your money has gone. By the end of the year, you will likely be surprised at how much you were able to save based on your projected plan. Your budget will also help smooth out the tax filing process, because you will be fully prepared with the financial details that you are asked to include in the paperwork.

If you are over 50 years of age, you won’t have to use that hard-earned, well-saved money on hiring someone to help. The AARP organization has a program that provides a volunteer to assist you with your taxes, and for those over 60 years of age, the IRS provides a similar service through TCE volunteers. All you have to do to take advantage of either opportunity is to contact a location closest to you to set-up an appointment.

After you have used all of the applicable senior  tax deductions and benefits, you can use your substantial refund to build an emergency fund, invest in a small side business, or increase your savings account. You could make an extra payment on your home or use the money to upgrade a few things around your house. Then, sit back and enjoy the fruits of your labor, delightfully knowing that you have handled your money the smart way.

A healthy handle on your bank account is just a financial blueprint away. Making savvy real estate decisions, budgeting, understanding what tax benefits are available to you, and carefully managing your tax refund are all easy stepping stones toward financial freedom. Don’t be overwhelmed by the future, but be excited about the possibilities.