Advice offered by Marc Hebert, president of The Harbor Group Inc., a certified financial planner. If you have any questions about finance or if you’d like to suggest a future topic, email webstaff@wmur.com.Perhaps your finances are like the roads you travel with smooth surfaces ahead. On the other hand, your finances could be like spring roads in New England: bumpy and full of potholes. Whichever the case, here are a few tips to help you navigate the road and to reach your financial destination.Know yourselfSuccess starts with ourselves. This includes our thoughts, our emotions, and our actions. The starting place to being financially successful is doing some serious self-analysis. Try to understand your relationship with money. There are books on money psychology to help get you started. Sometimes, meeting with a reputable credit counselor is a good first step. A financial planner or a therapist may be a source of help, as well.Stay alertIn order to review your finances, it helps to know where your money is going. Just what are you spending your hard-earned cash on? Do you engage in a lot of impulse spending? As an example, dining out once a week with a cost of $25 adds up to $1,300 per year. We are not saying don’t dine out. We are asking whether this is the best thing for you and your finances. Once you have an idea of your spending habits, it helps to prepare a budget. Do you have an emergency reserve? Determine what you need to save in order to retire. See if your insurance coverage is appropriate for your situation. Review and monitor your financials. This is one way you will know if your financial affairs are in order. It gives you a road map for the future. Track your net worthThe term net worth refers to the difference between your assets and your liabilities. To start, list out all of your assets, including investment accounts, retirement plans, and personal property. Next, list all of your liabilities. This will include debt such as a mortgage or auto loan as well as credit card debt. Subtract the two numbers and you have your net worth. This number represents a snapshot in time of your financial picture. A periodic review of the number can provide some insight into your direction in life. If the number is going up, you are building wealth. If it is going down, then your financial situation may be deteriorating and it might be time to find out why.Improve your financial knowledgeThere are no doubts that finances can be complicated. Fortunately, there is no limit on sources of information available. Websites, books, magazines and classes are there to help. By increasing your financial knowledge, you can make better decisions and smooth the path ahead. Make spending some time planning your finances a priority. Assume personal responsibilityIt is sometimes a great thing to hand the management of your finances over to someone more knowledgeable. However, the more you know and are involved, the better you will be. You can decide whether you are on the right path and are really benefiting from the help.Be realistic to yourselfSometimes we kid ourselves. Someone might feel they are an extraordinary investor even if they have benefitted from the market lifting all boats. Overconfidence isn’t a good thing. Be realistic about your financial picture and your skills. This will help you make the strides ahead. No one’s financial road is completely smoothMonitoring your finances can give you a chance to stay the course and make adjustments along the way. A well-informed and trained driver can travel the road to financial success. Whether your goal is buying a home or enjoying retirement, a well-planned road trip will help you reach your goal.
Advice offered by Marc Hebert, president of The Harbor Group Inc., a certified financial planner. If you have any questions about finance or if you’d like to suggest a future topic, email webstaff@wmur.com.
Perhaps your finances are like the roads you travel with smooth surfaces ahead. On the other hand, your finances could be like spring roads in New England: bumpy and full of potholes. Whichever the case, here are a few tips to help you navigate the road and to reach your financial destination.
Know yourself
Success starts with ourselves. This includes our thoughts, our emotions, and our actions. The starting place to being financially successful is doing some serious self-analysis. Try to understand your relationship with money. There are books on money psychology to help get you started. Sometimes, meeting with a reputable credit counselor is a good first step. A financial planner or a therapist may be a source of help, as well.
Stay alert
In order to review your finances, it helps to know where your money is going. Just what are you spending your hard-earned cash on? Do you engage in a lot of impulse spending? As an example, dining out once a week with a cost of $25 adds up to $1,300 per year. We are not saying don’t dine out. We are asking whether this is the best thing for you and your finances. Once you have an idea of your spending habits, it helps to prepare a budget. Do you have an emergency reserve? Determine what you need to save in order to retire. See if your insurance coverage is appropriate for your situation. Review and monitor your financials. This is one way you will know if your financial affairs are in order. It gives you a road map for the future.
Track your net worth
The term net worth refers to the difference between your assets and your liabilities. To start, list out all of your assets, including investment accounts, retirement plans, and personal property. Next, list all of your liabilities. This will include debt such as a mortgage or auto loan as well as credit card debt. Subtract the two numbers and you have your net worth. This number represents a snapshot in time of your financial picture. A periodic review of the number can provide some insight into your direction in life. If the number is going up, you are building wealth. If it is going down, then your financial situation may be deteriorating and it might be time to find out why.
Improve your financial knowledge
There are no doubts that finances can be complicated. Fortunately, there is no limit on sources of information available. Websites, books, magazines and classes are there to help. By increasing your financial knowledge, you can make better decisions and smooth the path ahead. Make spending some time planning your finances a priority.
Assume personal responsibility
It is sometimes a great thing to hand the management of your finances over to someone more knowledgeable. However, the more you know and are involved, the better you will be. You can decide whether you are on the right path and are really benefiting from the help.
Be realistic to yourself
Sometimes we kid ourselves. Someone might feel they are an extraordinary investor even if they have benefitted from the market lifting all boats. Overconfidence isn’t a good thing. Be realistic about your financial picture and your skills. This will help you make the strides ahead.
No one’s financial road is completely smooth
Monitoring your finances can give you a chance to stay the course and make adjustments along the way. A well-informed and trained driver can travel the road to financial success. Whether your goal is buying a home or enjoying retirement, a well-planned road trip will help you reach your goal.
