Train like Rocky Balboa: the 90-day financial fitness program
Remember the training sequence in “Rocky?” He starts with a short run and small weights, then heavier weights, then there’s the climactic moment when he runs up the steps, with kids cheering in the background.
Each of us can be our own financial Rocky, beginning with relatively easy things like defining goals and making a budget, working up to heavy lifting like balancing a checkbook and investing. (It’s unlikely, however, that crowds of children will be screaming, “Go!” when you open your 401(k).) Here’s your own fiscal training program – 90 days to financial fitness.
Step One, Week One: Set specific goals
Step Two, Week Two: Make a budget
Write down your expenses and your income, using this budget worksheet. Now, see which expenses you might be able to reduce or eliminate. For example, you could lose the daily $4 mocha grande cappuccino and just drink the free office coffee. Or bring your lunch to work.
Step Three, Weeks Three and Four: Living Within Your Budget
Step Four, Week Five: Putting Money in Savings
Most employers can set up an automatic withdrawal from your paycheck into a savings account. That way, the transfer happens automatically and you never even have to worry about it. Here’s a rundown on different types of savings accounts.
Step Five, Week Six: Balancing Your Checkbook
In this process, you’re comparing the monthly reconciliation worksheet your financial institution sends you against your check register. That worksheet often has instructions on how to balance your checkbook; or for a more detailed, step-by-step guide, click here. One of the easiest, quickest ways to manage your checking account is online – you can do all your checkbook balancing without the bother of paper and pencil.
Weeks Seven, Eight, Nine: Stay Balanced
Week Ten: Take Stock
Take a good look at things that you have not been able to achieve on a regular basis, and figure out if it is realistic to think you can achieve them in the future. If not, then do what the GPS unit always says when you miss an exit: “Recalculate.” For more tips, click here.
Week Eleven: Investing in a 401(k)
The same is true of IRAs, although the maximum amount you can invest annually in an IRA is substantially less than what you can put in a 401(k) or 403(b). So if your employer doesn’t offer a tax-deferred plan, open an IRA or a Roth IRA and reap the tax benefit come April 15.
Week Twelve: Congratulations!
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