By Rick Rodgers
Here are his seven tips for keeping you financially healthy and fit.
- Review your credit report-Borrowing money isn't the only reason to check your credit. Employers check credit reports and so do insurance companies. Your credit score can have a profound effect on the amount you pay for auto and homeowners insurance and perhaps on health and life insurance in the not-too-distant future.
- Set up an Automatic Savings Plan (ASP) – If your employer doesn't offer this through payroll deduction, you can set one up through your bank or brokerage account. Simply have a certain amount of money withdrawn from your checking or savings account each month and deposited into your investment account.
- Establish a cash flow plan – Business owners know you cannot control what you don't track. Take the time to forecast Your income and expenses for the year, and put it in writing. Then adjust those numbers to reach your goals, such as paying down debt or replacing a car.
- Pay off your credit cards – Cash doesn't earn much interest sitting in a deposit account (less than 1 percent) and even "low interest" credit cards charge 10 to 12 percent. So if you're sitting on any extra savings, consider using it to pay down credit card debt. Your cash flow plan should include a schedule to eliminate credit card debt.
- Shop your insurance – There is a huge incentive for a competing insurance agent to find you the lowest premium in order to win your business. Make note of the coverage levels you have for your homeowner's and auto policies and use them to comparison shop. Look at ways to save on your health insurance coverage, too.
- Write an estate plan – At a minimum, you need to have a valid will, power-of-attorney (POA) for your finances and health-care decisions, and a living will (Advanced Healthcare Directive in some states). Decide who will be your personal representative in the event you become incapacitated (POA) or at your death (executor). If you have minor children, choose who will raise them in your absence and establish a testamentary trust for their finances.
- Meet with a financial adviser – A good adviser will help you develop a budget, look at your debts, tax situation, retirement and college savings, estate planning and insurance.