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30 Days to Financial Fitness

The thought of getting your finances in shape might be overwhelming, but breaking down your personal-finance to-do list into discrete daily items makes the process easier and more manageable.

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Do you feel as though you aren’t on solid financial footing? Most of us worry about aspects of our financial life, whether it’s to save for retirement, get out of debt or reach another personal-finance goal. About one-third of Americans planned to dedicate at least one New Year’s resolution to their personal finances in 2017, according to a November 2016 Capital One Investing survey.

We spoke with 13 experts to help you to create a personal-finance plan that will put you on the right path. You can start your journey to financial fitness now, one day at a time.

Day 1. KNOW THYSELF
What’s your relationship with money? Taking time to think about your habits and emotions makes it easier to make wise financial choices, says Susan Zimmerman, who is a co-founder of Mindful Asset Planning. “Very often, these behaviors we’ve all had with our money are unconscious,” she says. You should think about your “money personality”—impulsive shopper? controlling saver?—and ways to shift your behavior. One tip from Zimmerman: You should think of yourself as your money’s nanny. Look at your paycheck, she says, and ask: “How do I take good care of this money, so it takes good care of me down the road?”

Day 2. GET ORGANIZED
Are your financial files a mess? You aren’t alone. “Our financial lives are incredibly complex,” says Nancy Doyle, who is the author of “Manage Your Financial Life: A Thoughtful, Organized Approach for Women.” “We are inundated with information.” Getting organized reduces intimidation, she says. You should determine “what to keep, what to toss, what to shred, what to recycle.” For example, you should keep tax returns, bank statements and credit-card annual statements for 7 years and records of investment purchases for as long as you own the investment, Doyle says. However, you should shred monthly investment statements after you receive the year-end summaries.

Day 3. CREATE AN ICE FILE
Doyle recommends that you create an “ICE,” or “in case of emergency,” file. This file should include your birth and marriage certificates, Social Security card, any divorce records, military records and copies of your passport, driver’s license, credit cards and health-insurance cards (and estate-planning documents if you have any). If you own your home, you should include the title. Store these documents in a fireproof safe at home or in a bank safety deposit box, and—most important—tell a trusted relative or friend where you stored it. “The key to emergency information is making sure someone knows where it is,” she says.

Day 4. PLAN FOR EMERGENCY
You want people to know what they should do if you become incapacitated, Doyle says. You should list your financial accounts and the contact information for any financial-services professionals whom you hired, such as an accountant. Set up a way for a trusted relative or friend to get cash to pay bills, and detail which bills are on auto-pay and which have to be paid manually.

Day 5. TRACK SPENDING
Where does your money go every month? We believe that you should gather your bank and credit-card statements for the past 3 months and then log where you spent your money, by category. “When you can measure it, you can change it,” says Maura Griffin, who is the founder of Blue Spark Capital Advisors.

Day 6. CREATE A BUDGET
People generally don’t make money mistakes on purpose, says Dave Ramsey, who is a nationally syndicated radio host and the author of “The Total Money Makeover: A Proven Plan for Financial Fitness,” but the lack of a budget can lead to mistakes. Having a budget reduces stress, Ramsey says. “The budget gives you permission to buy that shirt and not feel guilty.” He notes “three essentials” to making a good budget: Do it in advance, customize it for each month and make it “zero-based.” In other words, each dollar of your income has an assignment, so you account for everything, Ramsey explains.

Day 7. NOTE YOUR GOALS
What do you want to do in 5, 10 or 20 years? If you don’t write your goals—and map out the cost to attain them—it will be difficult to reach them, says Frank Paré, who is the president of PF Wealth Management Group. Detailing your goals in specific terms forces your brain “to key in on what has to happen for [those] goals to come to fruition,” Paré says. You should be specific: Rather than say, “Five years from now, I want to be debt-free,” you should say: “On April 5, 2022, I will be debt-free.” You should include the amount of money that’s required to reach your goal.

Day 8. START TALKING
It’s crucial that you talk with your spouse or partner about your long-term financial and health-care goals. If you’re single, talk with your parents, siblings or any adult children. “Are you going to be responsible for the care of aging parents? What kind of contribution is the family going to make to the children’s tuition? These are all decisions that need to be talked out in the family,” says Kevin Brauer, who is the chief financial officer of Affinity Federal Credit Union.

Day 9. AUTOMATE SAVINGS
Setting up automatic payments from your paycheck or checking account to a retirement or savings account “is the easiest and most reliable way to save money for the future,” says Jane Bryant Quinn, who is the author of “How to Make Your Money Last: The Indispensable Retirement Guide.” “You simply forget” about that money, she says. “It can sit there and grow.”

Day 10. PAY OFF DEBT
U.S. households owed $12.35 trillion in mortgage, credit-card, automobile and student debt as of Sept. 30, 2016, according to Federal Reserve Bank of New York. Not all debt is bad, but if you have credit-card debt, you should move to eradicate it. Conventional wisdom is to pay off any debt that has the highest interest rate first, but Ramsey says you should target the smallest amount of debt. “Pay the minimum payment on everything but the little one, and you attack the little one with a vengeance,” he says. When the smallest debt is gone, you then apply its payment to your next-smallest debt. Over time, your payments “snowball,” and you speed up the process to pay off your debt.

Day 11. SAVE FOR EMERGENCY
Investors’ top goal for 2017 is to create an emergency fund, according to the Capital One survey. With good reason: If you don’t have an emergency fund, the inevitable unexpected events that occur—most notably, if you were to lose your job—might cause you to rack up debt. A general rule is to save 6 months’ worth of nondiscretionary expenses, such as mortgage/rent, utilities and food.

Day 12. SPEND LESS
Spending less “is the most important thing you can do to get ahead with money,” says Pete Adeney, who is the founder of MrMoneyMustache.com, which focuses on financial independence. “You can also work on earning more, but without developing the skill of controlling that outward flow of money, it’s easy to be broke at any level of income,” he says. Adeney suggests that you apply a long-term perspective to your purchases. “I encourage people to consider everything over a minimum of a 10-year period,” he says. “A daily sandwich at the cafe is not just five bucks. It’s over $25,000 of lost wealth” if you were to invest that same daily $5 in basic long-term mutual funds. For any weekly expense, he says, you should multiply it by 750 to determine the 10-year compounded costs.

Day 13. NEGOTIATE BILLS
You don’t have to cut out all purchases. “It’s always a good idea to call companies to negotiate everything from a subscription fee to your credit-card interest rate,” says Jeanette Pavini, who is a savings expert at Coupons.com. For example, she says her newspaper had an introductory subscription rate that went up about 30 percent after a year. “I called, and they gave me the lower price again for the second year,” she says.

Day 14. MAKE MORE MONEY
The rise of the so-called gig economy provides more opportunities to earn extra cash. Ride-sharing or home-sharing are the most well-known options, but dog-walking (Rover.com), doing chores (Taskrabbit.com) or creating items to sell (Etsy.com) are ways to earn money through doing tasks that you might enjoy. You should keep track of your expenses for tax time.

Day 15. REAP THE REWARDS
Rewards programs can be “incredibly valuable” to help you to reduce expenses, whether the programs come in the form of cash-back credit cards, hotel points or frequent-flier miles, says Zach Honig, who is the editor-in-chief at The Points Guy. However, he’s quick to point out that he doesn’t recommend rewards-earning credit cards to cardholders who carry a balance, because the interest could wipe out the value of the reward.

Day 16. GET YOUR REPORTS
Aside from checking your credit report annually (annualcreditreport.com) to make sure that your credit accounts show no unusual activity, you should visit ChexSystems.com, too. In September 2016, Wells Fargo was fined $185 million after federal regulators determined that the bank opened at least 2 million accounts that customers never requested. Such accounts can affect your credit rating. “You’re allowed one free-per-year ChexSystems report, which is good to [check] to make sure there aren’t phantom and zombie accounts that you’re not aware of,” says Ken Tumin, who is the founder and editor of DepositAccounts.com.

Day 17. KNOW YOUR SCORE
Your credit report doesn’t include your credit score—the number that lenders use to determine whether you’re a worthy credit risk. You have to pay to see that. Free “credit scores” that you might see on some websites differ from the one that your lender uses to judge you, but you can use the scores as a benchmark to determine where you can make improvements. The free score “tells you roughly where you are,” Quinn says. “If you’ve taken steps to improve your score and see it rise on the free score, it will also be rising on whatever score the lender uses.”

Day 18. CLOSE ACCOUNTS
If you have multiple credit-card accounts, you should close some, Ramsey says. “One, it keeps you from using them, and two, it keeps an identity thief from using them.” However, closing accounts might ding your credit score, he adds. It makes sense that you should close accounts only when you know that you won’t apply for a loan or other credit for a few months.

Day 19. SAVE FOR RETIREMENT
In 2017, people who have a 401(k) will be able to contribute $18,000 annually, but few savers take full advantage of this benefit. A general rule of thumb is to put aside at least 15 percent of your salary for retirement, but you should contribute at least enough to get the full benefit of any matching contribution and try to increase your rate every year.

Day 20. CUT YOUR COSTS
Investment fees can add up. Securities and Exchange Commission notes that $100,000 in a mutual fund that earns a 4 percent annual return over 20 years and has ongoing administrative fees of 0.25 percent will grow to $208,413. If that fee were 1 percent, you’d end up with $179,213. That’s a bite of $29,200. Review what you pay for mutual funds or other investments. If you pay at least 1 percent, you should look for similar investments that cost less.

Day 21. ALLOCATE STOCKS
You don’t want inevitable stock-market gyrations to cause you to panic and sell at the worst possible time. A general rule of thumb is that the percentage of your portfolio that’s invested in stocks should be equal to “100 minus your age,” with the rest in bonds. If you have to change your investments to fit your allocation target, you should be wary of tax or fee implications of any moves that you make.

Day 22. CHECK INSURANCE
You should make sure that your insurance covers you adequately and “shop around” on rates, Quinn says. That’s true of automobile, health, homeowners (or renters) and term life insurance after the term expires. If you still are insurable, you might be able to buy a smaller amount of term life insurance, she says, “because the term of your life is now shorter.”

Day 23. UPDATE YOUR RÉSUMÉ
You never know when you might want to switch jobs—or when you have to find a new job. It’s easier to update your résumé regularly than it is to unearth it years later and try to remember your accomplishments. Similarly, you should keep in touch with your professional network, because you never know who might help you to land your next job. Hiring managers’ second-most preferred method is to hire through an employee referral, according to a 2016 survey by Jobvite, which is a recruiting company.

Day 24. REDUCE ENERGY
You can reduce your utility bills by taking a closer look at your energy use. Department of Energy estimates that homeowners can save $723–$1,182 per year by making energy-efficiency changes, and some changes apply to renters, too. For example, using a power strip for electronic equipment—and turning it off when you don’t use it—can save an average of $100 annually, DOE says.

Day 25. TURN STUFF INTO CASH
Is your house full of stuff that you don’t have to have? “The true cost of a thing goes well beyond the price on the price tag,” says Joshua Fields  Millburn of The Minimalists (theminimial ists.com). Each “thing” requires you to store it, maintain it, clean it and more, he says. The Minimalists suggest this strategy: Pack up your belongings and, over the course of a week, unpack only what you have to have. After the week is up, sell or donate what you didn’t use. (Save a receipt of any donation for tax time.)

Day 26. PROTECT YOUR DATA
In one of the biggest data breaches of all time, Yahoo announced in December 2016 that at least 1 billion user accounts were hacked, including email addresses and passwords. You should change the password for your online accounts if you haven’t done so lately. (A computer password manager can help.) You also should upgrade to the latest antivirus and anti-malware software for your computer and your smartphone.

Day 27. PLAN YOUR ESTATE
When music icon Prince died in 2016, he had no will, so his estate paid at least $2.3 million in legal fees in 3 months, and the estate likely will face a huge tax bill in 2017, according to reports. Don’t leave your loved ones in a similar lurch. At the least, you should have a will, a financial durable power of attorney (DPA) and a health-care DPA, says Dean Hedeker, who is an estate-planning attorney and principal at Hedeker Wealth.

Day 28. CHECK BENEFICIARIES
Too often, people fail to name a beneficiary to their 401(k) or other retirement and insurance accounts, or they name one and don’t change it when their circumstances change. That’s why ex-spouses sometimes find themselves to be the beneficiaries of long-held accounts. “Go to all the institutions where you have accounts—IRAs, 401(k)s and the like—and make sure you have the right beneficiary on there,” Hedeker says. Don’t forget to check your bank accounts, too.

Day 29. CONSIDER TAXES
A Roth individual retirement account (IRA) doesn’t benefit you at tax time right away, as a conventional IRA does, but when you withdraw the money in retirement, your contributions and any investment earnings are tax-free. Plus, you can withdraw your Roth contributions (but not the investment earnings if you're under age 59-1/2) penalty-free, so Roth IRAs can act as a backup emergency savings account, if necessary.

Day 30. REVIEW REGULARLY
Congratulations! By taking action, you put yourself on sound financial footing. Of course, as with physical fitness, you have to make financial fitness a habit. Whether you use an online calendar or you make a mental note, you should review the steps that you took. You should check your goals and spending plan monthly, and other items that are on this list annually. A regular checkup with your finances will keep you moving toward your life goals.

Andrea Coombes has written about personal finance for 15 years. Her stories have appeared in MarketWatch.com and The Wall Street Journal, among others.

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