While completing my “fall” cleaning of electronic documents on my hard drive, I came across a list of 10 Financial Health Tips. I had written these for a luncheon featuring a women’s financial panel a few Novembers ago. To justify keeping this list, I decided to recycle and revamp for your reading pleasure today.
- Diversify your investments – Spread your money among different investments to reduce overall risk. To put another way, don’t plant a garden with all the same seed. If you’ve ever kept a garden, you’ll understand that variety is key. Despite your efforts, inevitably one type of produce will not sprout or will be less bountiful.
- Review insurance policies often – I read something this week that said the average person spends less than an hour reviewing and understanding their open enrollment decisions. Likely just checking the box to keep things the same as the previous year and not knowing what they are or are not insured for. I dive deeper into this financial health tip in a separate article “Insurance Tips and Tricks”.
- Review your finances regularly – You should have a feel of where you stand with your finances and where your money is going…are you on track to meet your goals? If you can’t answer that question, you may need to first review your goals then take a closer, more frequent look at your overall financial picture, including budget and net worth.
- Don’t carry a balance on your credit card – My credit card company could be considered my second employer. They are constantly paying me cash back for purchases. Have a healthy relationship with your card by swiping then paying the FULL balance each month. An outstanding balance would be subject to a huge interest charge and would eat into your credit card perks.
- Make automatic retirement plan contributions – Whether through payroll deductions to your employer sponsored plan or setting up a monthly contribution to an Individual Retirement Account, making savings automated is an easy way to maintain your savings goals.
- Be engaged in your finances to understand what’s going on – Letting your personal finances be your spouse’s “thing” or not asking questions to avoid feeling unintelligent are recipes for disaster. Feel empowered by knowing about your finances and ask questions to fill in the gaps.
- Know how much you are paying in fees on your investments – There are costs associated with investing that decrease return. Shop and compare fees associated with your investments and the cost associated with managing.
- Make payments in advance of the due date – Late payments are avoidable. Auto pay is a heaven-sent tool.
- Know how to be frugal – Frugal doesn’t mean cheap. Frugal is being prudent or economical in the consumption of resources. Make smart money decisions by considering value, necessity, and affordability.
- Shop wisely – Especially for large or consistent purchases, shop wisely. Consider and compare total cost of ownership; how long something will last; is it better to buy in bulk; quality over quantity.
Readers of this article may be different than the original women’s organization audience they were written for, but these tips still hold value. Our own financial health is something we all should continuously be monitoring and improving to keep in tip-top shape.
Published in the Victoria Advocate
Beth Koonce is a CFP® Professional and Lead Advisor with KMH Wealth Management, LLC.