Take Control!
by Marla V. Brady
As time goes by, we feel that there are many things that are out of control, generally, and out of our control, specifically—the economy, crime, etc. This causes us to feel helpless.
But this is your year to take control of what you can. One of the first areas within your grasp is your finances. Some of you may feel a little out of control financially; you may feel and even be way out of control. I have good news for you, wherever you are on the continuum. You can take control.
- What are your goals this year?
- Do you want to go back to school?
- Are you losing weight and need to update your wardrobe?
- Is there a special trip you would like to take?
- Is there a business you would like to start?
- What is keeping you from reaching your goals? Is it money?
It does not have to be. You can do it with planning and, dare I say it, sacrifice.
The first step is to look at your cash flow. What money do you have coming in and where is it going?
Some expenses are fixed where you primarily pay the same amount every month. This would include, but is not limited to, your mortgage, rent, car payments, taxes, insurance, savings and investments. Next review your variable expenses—utilities, food, clothes, educational expenses, childcare, travel, entertainment and dining out.
Subtract all of your expenses, fixed and variable, from your income. This will provide you with your discretionary income. If that number is negative or less than you prefer, you need to review your expenses, and determine where they can be reduced. You can find extra money if you look at and track your spending habits.
Where are the leaks in your budget? Are you paying for premium cable, but only watching basic? Do you buy a particular magazine every month, paying full price instead of finding a less expensive subscription.
What is your beverage of choice that you have to have every day—coffee, Pepsi, Coke? Do you take your lunch to work or spend $5-$10 a day? Do you make a list when you go to Target, the grocery store or Sam’s Club? Or do you usually walk out with more than you meant to buy?
Take that extra money and make sure you are saving it on a regular basis for emergencies and short-term goals. For emergencies, you should set aside three-to-six months of your expenses. A short-term goal could be a vacation or down payment on a car.
Putting money away for your retirement is a necessity. If your employer provides a retirement plan through which you can contribute pre-tax, make sure you participate, whether they match your contribution or not.
If your employer does not offer a retirement plan, you can open an individual retirement account (IRA). If you are self-employed, speak with a financial advisor regarding your options.
This is your year: Plan, Save and Take Control.
Marla V. Brady is with Polaris Wealth Management. In addition to having her life and health insurance license, she also is an investment adviser representative and provides securities and investment advisory services offered through ING Financial Partners, Member SIPC.
Polaris Wealth Management is not a subsidiary of, nor controlled by ING Financial Partners. Ms. Brady is located at Polaris Wealth Management, 155 N. Michigan Avenue, Suite 624, Chicago, IL 60601; contact her at 312-951-2606 ext. 131 or MBrady@PolarisAdvice.com.
