Eyes Bigger Than Your Stomach?

A couple of months into the New Year and the crowds at the gym are already thinning out, the consumption of less than healthy food is increasing, and the vows to improve areas of our lives are now just fading memories. I believe most of us try to make too many changes all at once and then get overwhelmed and give up. It reminds me of times as a child that I would promise my mother that I could, for sure, eat another hamburger.  She would reply, “I think someone’s eyes are bigger than his stomach.” As a financial advisor, I often meet with people who have concerns that they haven’t saved enough for retirement, for college, for long term care, etc. We can’t change the past, and we don’t know the future and the best we can do is to start from wherever we are today. I would encourage you to make a springtime resolution to review and improve your financial health. Read through the following list and find a couple of items that are most important for you and your family then commit to complete them this year.

• Renew your resolve to get out of debt. Nothing will derail a financial plan quicker than debt.
• Create a spending plan. Make sure to involve your spouse in this process. It is also a great teaching opportunity for children.
• Build an emergency fund of at least three months of living expenses.
• Create or update a long-term investment plan. A concrete investment plan will ensure discipline when the markets are volatile and keeps the focus on your goals rather than what is happening today.
• Review the allocation of your investment portfolio between stocks and bonds. The allocation will determine the performance of your portfolio more than any other decision.
• Contribute to your retirement plan at work at least up to the matching percentage. If you do not have a retirement plan at work then establish an IRA and begin contributions.
• Make a will. If you already have one review it for changes to beneficiaries, etc. You should also have a living will and powers of attorney drawn up, if appropriate.
• Review your life insurance coverage to make sure it is sufficient to provide for your family’s future.
• Consider purchasing an umbrella liability insurance policy as well as adding earthquake and sinkhole coverage to your homeowner’s policy. This is relatively inexpensive for the amount of coverage provided.
• If you are approaching age 60, you should consider long term care insurance.
• If you are nearing Social Security retirement age, it is time to decide when to start receiving benefits.
• If you have reached your financial goals and have sufficient assets to meet the needs of your family, then you should consider how best to give away your excess to meet the needs of others.

Each of us can take steps to improve financial health. Don’t let your eyes get bigger than your stomach and become discouraged by trying to do too much at once.