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Getting Fiscally Fit

Jan/14/2024 / by brian-sodoma

A certified financial planner offers tips on sorting out your monies in 2024

Graphic collage of woman's arm rising holding 100-dollar bills
Image via Shutterstock

The holiday season is a time of excess for many. Parties and rich foods add pounds to our bodies, while gifts and travel drain our bank accounts. A November 2023 WalletHub survey found about one-fourth of Americans are still paying off debt from last year. While many of us have made health-related resolutions, January is also a good time to be more financially fit.

Mahesh Odhrani, a certified financial planner and the founder of financial planning services firm Strategic Wealth Design, shares useful tips to get your financial house in order in 2024.

Start With An Honest Assessment

If you start a fitness routine, the first thing you’ll want to do is assess where you are physically. Knowing what you can accomplish right now will help you avoid injury and create realistic goals for the future.

You’ll want to do the same with your finances, Odhrani says. He calls it “taking score” and encourages people to be honest about their situation. Is there credit card debt to pay off? You’ll probably want to prioritize that. Do you need to save more? Is there a future expense you need to save for like a home remodeling project? Once you identify the area you want to work on, Odhrani adds, “Be very specific with goals and make them measurable, attainable, and realistic.”

Find An Accountability Partner

Goals give a sense of hope and encourage us to develop a plan. That’s great, but you need someone to hold you accountable, a person to check in with at regular intervals to make sure you are still making progress toward your goal. “You want to share your goals with someone and meet with them regularly for updates,” Odhrani emphasizes. “That person, a coach, colleague or family member, will help you stay on track.”

Save First, Then Spend

Getting your financial house in shape usually involves one of two things: either controlling spending or increasing savings. It’s important to recognize that adjusting spending goes hand in hand with saving. Odhrani advises that the best way to ensure you stick to your saving plan without overspending is to pay yourself first. This idea has been around for a long time but was made popular by financial expert Robert Kiyosaki.

“Many of us save money after we have spent on lifestyle,” Odhrani adds. “When you pay yourself first, you set aside the money for the savings plan before you spend and then what’s left over, you live within that spending plan.”

Start To Build Your Emergency Savings

Unexpected medical bills and home or car repairs can devour an emergency fund. For many of us, our emergency funds are not large enough to cover sudden expenses. Ideally, you want six to nine months of monthly basic living expenses set aside in an emergency account. Odhrani acknowledges that may seem intimidating, especially if you’re starting from zero. So make a goal to save two or three months’ worth of expenses first.

“I always recommend to just start somewhere with creating that rainy day fund,” he says. “At first, three months, if you’re there, then look at three to six months, then you can maybe pull back and start saving for retirement. I recommend you start saving for this first before aggressively saving for retirement.”

Trim Small Expenses For Big Savings

Assessing small repeated purchases can go a long way in helping you achieve your savings goals. Yes, that means those expensive coffees and other seemingly small daily splurges. Odhrani himself recently decided to stop ordering a soda at lunch meetings with clients. These meetings occur several times a week, he explains, so savings over a year compounded quickly. Brown bagging lunches and meal prepping can also help trim costs for an individual or family and save thousands of dollars a year.

If you’re still struggling with where to start to become more financially fit, Odhrani recommends tapping a financial advisor. Most will not charge you for an initial consultation, and the information you gain from that could be just what you need to make a few simple changes for a prosperous 2024.

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