How financially fit are you? Alan Clopine, CPA gives you five pieces of advice for getting in shape when it comes to your finances.
1. Weigh in (where are you at?)
2. Go on diet (get your debt & loans in order)
3. Cut down on empty calories (a.k.a taxes)
4. Spend less, save more
5. Make sure you have a coach (a financial planner)
“Are you financially fit? Everyone wants to get in shape, but how about financially? Hi, I’m Alan Clopine, Chief Financial Officer of Pure Financial Advisors, and you’re watching Pure’s Question of the Week.
How do we get fit financially? Let’s start by weighing in where we are at.You want to take a look at your assets, look at your cash, look at your non-retirement assets. Look at your retirement accounts, add those together. That will be your total liquid assets. Add your real estate equity which is the value of the real estate minus the loan to get total net worth. If you’re like a lot of people, you may feel like you’re behind. So we need to get on a program.
Step number two is we need to go on a diet. Number one as far as a diet goes, how about your debt? Do you have debt? Do you have consumer debt? Do you have car loans? Student loans? Do you have credit card debt? If you have credit card debt, it can be pretty expensive. The interest rates per year are 15%, 18, even 29% I’ve seen. If you have credit card debt, you’re going to want to spend less so you can get that retired as soon as possible. Sacrifice a little today to put yourself in a much better position.
By the way, if you’re spending less, how about saving more? We know that the average 401(k) balance according to Fidelity Investments is $91,000 and that’s just not going to cut it. You’re going to need to get more money into that 401(k) for your own retirement.
What about this–empty calories. We all love potato chips, but in terms of financially, empty calories are taxes. Let’s figure out ways to pay less taxes, and there’s a lot of them, not only for this year but future years down the road. Understand the tax law.
The fifth thing of putting this all together is make sure you have a coach, a financial planner to not only make sure you’re on track but monitor your progress as you go. When you find this coach, make sure they’re a Certified Financial Planner™, they’re fee only, have appropriate experience and that they’re a fiduciary–so they’re looking out for your own good.
If you follow these five things, you will be in much better shape financially. I’m Alan Clopine, and you’ve watched Pure’s Question of the Week.”