Interested in long-term financial security? Consider giving yourself the gift of financial fitness all year long. Unfortunately this gift does not come neatly gift wrapped with a big, pretty bow. You must work hard to make this gift a reality. You may even have to make sacrifices such as fewer meals out, less money spent on clothing or entertainment, or driving your car another year.
How do you get started? Consider the following suggestions from Clemson Cooperative Extension in South Carolina:
January: Get on the financial scales and create an overview of your financial situation. What do you own and what do you owe (your net worth)? How much income comes in and where does it go?
February: Keep an expense log for several months. Compare expenses with income. Income should exceed expenses or you are headed for financial trouble.
March: Reduce clutter in your financial life. Keep only important receipts, records, and papers. Instead of using the "stash and pile" method of organization, use the "file It, find It" approach.
April: Trim your taxes. Track all deductions, contribute the maximum to tax-deferred retirement plans (e.g., 401(k)s) and evaluate potential tax credits. Meet the April 15th deadline or file for an extension to avoid penalties.
May: Reduce expenses and debt. Curb the temptation to spend more than necessary and avoid the overuse of credit. Get in the habit of "smart spending." Before making spending decisions, ask yourself, "Is what I am getting today worth the money I lose for future goals?" And remember, using credit does not extend your income, it only adds to your debt.
June: To ensure steady, healthy growth of your net worth, use the savings strategy, "pay yourself first." Establish a regular savings plan and consider it one of a major bill to pay monthly.
July: Exercise the best insurance options. Review all coverages. It is a good idea to compare your company's coverage with that of two other companies to be sure you are getting the best protection for your money.
August: Now that you have a good understanding of your resource base, you are ready to begin working on establishing long-term financial goals. Identify your long-term goals, attach a dollar value to them, and develop a plan to achieve them.
September: Choose a savings or investment plan to help you reach long-term goals. Explore options available through your employer and financial institutions.
October: Make dinnertime a special time. Share money management skills with your children and encourage them to save and invest for their financial future.
November: Keep your financial health in good order, even if you become physically ill or incapacitated. Execute a living will, health care power of attorney, general durable power of attorney, and will.
December: Distribute good will to family and friends and share your bounty with others. Give wisely to charities. Be sure the charity is reputable and know what they do with the money collected.
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