September 22, 2023

Financial Wellness in 2016

by Mark Briscoe

It is a new year and we all know what that brings: resolutions. Focusing on health and losing a few pounds are typically first and foremost with many but what about your financial health? Is this on your radar for 2016? Let’s look at specific steps you can take to becoming more financially savvy this year.

Let’s face it, one of the biggest mistakes an individual can make is to do nothing at all. Finances can be overwhelming and most of us are not financial gurus. Sometimes, it may seem easier to avoid the burden altogether and leave this huge responsibility to a spouse, an advisor, or simply leave it unchecked. This is never a good idea.

Do you feel like you are starting from ground zero? There are plenty of websites, webinars, blogs, apps and other tools that offer helpful information to enhance your financial savviness. The best part of these offerings is that many do not cost anything. If you do a little research, you may even find that there are free presentations in your very own community that will help you get a handle on the financial learning curve. Everything from tackling debt, retirement planning, estate taxes, investing and more may be covered.

Finances can be a difficult topic to discuss; it can even be a source of conflict for couples because everyone has their own perceptions of money and how it should be handled. Leaving your finances to be handled by one individual and not taking an active role and understanding can be problematic. Suppose you and your partner split or your advisor runs off with your investments. What will you do then?

If you have a partner and only one of you has been appointed as the head of financial affairs for your family, make it a priority to sit down each week and discuss your finances together. Maybe one of you is in charge of handling bills while the other one is responsible for investing. Either way, discuss your financial strategies with one another and keep this discussion going on a regular basis. And when life happens, the other family member will not be completely starting from scratch in the midst of a crisis, which is definitely no place to start.

Maybe you are on your own and recently divorced. Did you know that there are certified divorce financial planners? A divorce financial planner has expertise in the entire divorce process and can provide specific assistance in financial planning, asset protection, and other important items to consider in planning for your future. Look for the Certified Divorce Financial Analyst (CDFA) designation and bring your questions.

Debt equals stress for so many individuals. How much better would your life be if you didn’t have to worry about the burden of debt? Living a debt-free life can be attained and it is one of the main principles of my favorite financial advisor, Dave Ramsey. For many people, just getting out of the starting gates is the hardest part. Where do I start and how do I choose which debt to pay off first?

Ramsey’s advice is simple and it makes sense. While conventional wisdom would suggest that first paying off the debt that carries the highest interest rate makes the most sense, Ramsey’s solution takes a different approach. Ramsey advises that you start a “debt snowball,” paying off your smallest debt first while making minimum payments on others until the smallest is alleviated. You then tackle the next smallest debt until it is retired, working your way up to the largest debt. With each debt that is paid off, you are able to increase the amount of money being applied to the overall debt, thus creating a snowball effect. Sticking to this method not only retires these debts but also provides you with a great sense of accomplishment each step of the way and motivation to stay on track.

Whatever your 2016 goals are, make a concerted effort to dedicate time to learning more about your financial affairs every single week. Call it a money date and place it on your calendar. Whatever you have to do to ensure that you are learning more about your finances will benefit you, your loved ones, and especially your peace of mind.