Financial Health
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6 Smart Ways to Keep Your Financial Goals on Track

Use these tried-and-true expert tips to make your money goals a reality. 

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by Sally Herigstad

Financial fitness is a lot like physical fitness, in that consistency is the key to success. Short-lived bursts of energy do little good, whether you’re trying to lose weight or set a solid foundation for your financial health. The only way to reach your goal is to make a sustainable plan and stay on track month after month, year after year. These tried-and-true strategies can help you keep your money goals on track:

Sally Herigstad is a certified public accountant, personal finance expert and author of Help! I Can’t Pay My Bills: Surviving a Financial Crisis.

MAKE IT AUTOMATIC

2 / 7 MAKE IT AUTOMATIC

The more you make putting money aside automatic, the easier it will be. For example, if you have money taken from your paycheck for a 401(k) or similar plan, you know how much simpler it is to keep up your contributions than if you had to make a contribution from what’s left in your checking account every month. You can use the same principle to fund other financial goals. You could have part of your paycheck deposited into a savings account to meet a short-term goal, such as saving for a vacation. Take the decision-making out of the process to ensure that regular deposits are made.

WORK TOGETHER

3 / 7 WORK TOGETHER

If you combine your finances with a spouse or partner, make sure you are in agreement on your joint goals and how you will reach them. Couples and other family members working together can accomplish great things. On the other hand, two or more people who share finances—but have completely different ideas about how to handle money—are headed toward financial disaster.

KEEP LEARNING

4 / 7 KEEP LEARNING

Reading up on various aspects of personal finance and investing not only keeps you current, it helps you become better at managing your money. Perhaps there’s a financial expert whose money advice you find trustworthy and easy to follow. Many money pros have their own websites, books or tv shows that make it easy to dip in and out for information.

That said, be wary of trendy or alarmist advice. It’s possible to hear too much about every market dip or upswing. Do your homework and make your best decisions about your savings and investments, but don’t think you need to change your strategy based on the daily news. 

REBALANCE YOUR PORTFOLIO

5 / 7 REBALANCE YOUR PORTFOLIO

As you increase your savings and investments, some will do better than others. You’ll need to rebalance to make sure your portfolio, or collection of investments, is still what you had in mind.  Say you want to have 50 percent of your total savings and investments in mutual funds that invest in growth stocks—stocks that are in the growth phase of a company and carry both a higher risk and a higher potential reward. If your mutual funds increase in value, you may find that 70 percent of your portfolio is now in funds that are higher risk. You can sell some mutual fund shares and invest the proceeds in bonds or other more conservative investments. Selling some types of investments and buying other types to maintain your preferred level of risk and reward is called "rebalancing."

ALWAYS BE PREPARED

6 / 7 ALWAYS BE PREPARED

While you may already be on solid financial ground, be sure to plan for emergencies for real peace of mind. A serious illness, unemployment or other loss of income has knocked many a person off the financial track. Prepare for the unexpected by maintaining an emergency fund, updating your insurance coverage and keeping debt levels low.

UPDATE YOUR GOALS—AND YOUR DREAMS

7 / 7 UPDATE YOUR GOALS—AND YOUR DREAMS

It’s not enough to know that you need to save money. Keep at front and center what you're saving for. Your goals may change over time: you may decide to go back to school or buy a new home. Or your priorities may shift. Review your goals once a year. You’re more likely to keep your finances on track when you maintain focus on your money goals.