12 steps to take in honor of Financial Wellness month

I just heard this past week that January was Financial Wellness month. That’s not surprising since this is the month of New Year’s Resolutions. While January may be nearly over, this is still a good time to consider your overall financial well-being.financial wellness

Dust off the budget

Are you doing a regular monthly budget that is unique each month? If not there is no better time to start. If you aren’t accustomed to budgeting, understand that the first month you’ll probably forget some things as well as be off on your estimates of others. That’s ok. You simply need to adjust as you go. Know that as you learn each month will get a little better. It’s like riding a bike. Did you ride perfectly the first time you got on one? Or did you fall and skin your knees a few times before you got the hang of it?

And if you have been doing a budget have you gotten lazy over time? I know I have fallen into that trap from time to time. Autopilot is rarely a good navigator for your monthly finances.

Insurance check-up

Schedule an appointment with your agent to review your coverages. Has anything changed since you last met? Do you have sufficient coverage on your home? Are your deductibles still appropriate? Do you understand what is covered and what is not?

Review beneficiaries

Review the beneficiaries on your life insurance or retirement/investment accounts. This is especially critical if you had a significant life event in the last year, like a marriage or divorce, birth of a child, or the death of a beneficiary.

Check your taxes

We are entering into tax season. Are you expecting to get a big refund? If so that’s usually not a good thing. The IRS is not giving you free money. In effect you have simply given them an interest free loan over the last year and they are now giving you your money back. If you regularly get a large refund, adjust your withholdings so you can take more of your paycheck home each month.

Check your investments

This past year was a banner year for the stock market. That’s a great thing. One potential problem though is if you are diversified across a number of different kinds of investments, your percentages might be out of whack since some investment may have grown like crazy while others didn’t do as well. You might need to rebalance your investments to get back to the desired percentages.

Check your credit report

We have all head about the Target mess where millions of account numbers may have been stolen. Regardless of whether you were a shopper at Target during this time, it is always a good idea to check your credit reports periodically to make sure there are no unexpected entries. You can get one free copy of your credit report each year from each of the 3 credit bureaus by going to http://www.annualcreditreport.com.

Refinance your mortgage

While mortgage rates have begun to creep up a bit, they are still near historic lows. If you have not refinanced your mortgage and you still are paying an interest rate of 5 or 6 percent or more, it might be worth looking into how much you could save by refinancing.

Check your cable/phone/utility bills

Review your monthly bills. Are there TV channels you never watch? Perhaps you could downgrade to a lesser package. Services on your phone you never use that could be cancelled? Do you still need a land line and a cell phone? It also doesn’t hurt to call your providers and see what they can do. A couple years ago I saved nearly $50 a month by simply calling my current TV provider and threatening to switch to a different service. You don’t know until you ask.

Retirement contributions

If you have an IRA and you did not max out your contributions for the past year, you can still contribute up until April 15th and deduct the contribution from last year’s taxes.

Review your giving

This is the time of year when you will probably be getting yearly giving statements from your church or other charities. Review those statements. What percentage are you currently giving? Are you happy with that number? If not take steps to give more this year.

Learn something new

Lastly, if finances are a struggle decide today to learn some new skills. I think many people struggle financially not because they incapable of making wise decisions but because they simply have never been taught how to make better decisions. There is no shame in ignorance, but that is not an excuse for remaining so. Take a class. Financial Peace University is a great 9 week class that will teach you sound financial principles in a fun and entertaining way. Read a book. Check out my bookshelf if you don’t know where to start. If income is a problem, spend some time thinking about what you would like to be doing and earning 5 years from now and start making steps toward that goal today.

Finding Financial Wellness

All of these items are important and will help you move toward solid financial footing. But don’t be overwhelmed with the list. Do something today. Pick one item to focus on and commit to accomplishing it this week. Some of these items will only take you a few minutes, but will lead to a much healthier place financially.

What one thing are you focusing on this week?

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