How to live financially fit - Cincinnati News, FOX19-WXIX TV

How to live financially fit

Chances are you're always looking for ways to make more of it, or trying to figure out how to manage it; money. There's no time like the present to work on your financial fitness. FOX19 sat down with financial advisor Chip Workman to get some tips so you can be financially fit by the end of 2011.

Max out your savings. Workman says to save as much as you can, but be realistic in your goals. "You should start with an emergency fund. Fill up your 401k or other tax deferred vehicles and go from there." If you have a 401K Workman says to try and at least contribute up to the percentage your company matches. "A company match is free money there's nowhere else you receive 100% return on investment so at least match 100% of what the company will match," advises Workman. He also says ditch your debt. "If you can get rid of it get rid of it pay it down as quickly as you can."

Write it down. Workman says the best way to figure out what money you spend where is to write it down. Go through your bills and bank accounts and figure out where you spent your money and where you could stand to cut back. "A lot of people just simply are so fearful of what to do or not do because they don't know where they stand and getting it down, writing it down, figuring out where you are can be a big step in getting financially fit."

Put the plastic away. It's a scary thought for a lot of people but Workman says only spending the money you have for a month, is a great exercise in financial responsibility.

Clean up your investments. Take a look at where your money is, how it's performing and if it's not doing well, move it. Workman says too often professionals, especially young ones, are too nervous to take chances with investments like a 401K. But he says it will be so long before any of that money is spent, that now is the time to take a few financial risks.

Check yourself. Remember when you wrote down what you were spending your money on? Workman says don't just leave it at that. Check up on yourself. See how you are doing when it comes to your spending. Have you spent more than anticipated? On what? What changes can be made?

Make some new Christmas traditions. While this conversation might not be the ‘jolliest' Workman says to sit down with the adults in your life and talk about Christmas time. Do you just exchange $50 worth of stuff each year? Maybe a dinner out together is a better option for everyone's finances. "For holidays I recommend getting rid of stuff. Talk to family. Do you really need to go through the process of shopping and exchanging back and forth?"

A few other financially fit tips:

Workman says review your insurance, home and car, to determine if you're getting the most for your money. Do some shopping around. See if another company can save you some money.

Update your will. Circumstances change and it's the financially responsible thing to do for you and your family to make sure you have a will and that it's up to date.

Open a 529. It's tax free money for education for your children and grandchildren. And Workman says it's a great thing for grandparents to do because they get to control the money they're saving for the grandkids education. Plus, some states, like Ohio, give small tax breaks.

Story adapted from the WSJ

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