GOLDEN VALLEY, Minn. - Saving more and spending less is often at the top of the New Year's resolution list, but sticking to those goals requires some dedication.
Financial professional Matt Gulbransen, owner of Callahan Financial Planning, stopped by KARE 11 at 4 to talk about how you can pump up your pocket book and get financially fit.
“After your first trip to the gym, you won't see big changes and you also won't see big changes after one week of saving money,” said Gulbransen. “You need to think long-term. You should regularly be putting money into an emergency fund to save for the future.”
Here's how Matt recommends becoming financially fit:
Build a Routine
- To hit the gym regularly, you need to have a good routine. When getting your finances in order, you need a budget.
- Make sure you know how much money is coming and going. If you don't have a budget, Matt has a budget worksheet on his website, cfpcorp.net, to help you get started.
- If you have already created a budget, check it often to make sure you are sticking to it.
Start at a Slow Pace
- You can take off in a dead sprint, but you're going to get tired quickly. Slow and steady wins the race with your finances.
- If you are trying to save more money, start small by making your lunches at home or skipping your morning trip to the coffee shop.
- Then, as you find more areas to save, slowly make them part of your budget and you will see the savings add up in the long run.
Hit the Gym Regularly
- After the your first trip to the gym, you won't see big changes. You also won't see big changes after one week of saving money.
- You need to think long-term. You should regularly be putting money into an emergency fund to save for the future.
- A recent study by Bankrate found that nearly a third of baby boomers have no money saved for an emergency. That is especially troubling because people ages 53-62 cannot afford to dip into their retirement savings in case of an emergency.
- A good rule of thumb is to have 3 to 6 months of income on hand in a separate emergency fund.
Burn Off Fat
- Fat is the excess weight that is holding us back, much like debt.
- As a part of your budget, make a plan to pay down your high interest debt.
- A good plan of action is to keep paying all your debts, but make larger payments on your smallest debt. You will pay down that debt faster.
- Then when you have paid off that debt, move that money to your next smallest debt and start paying that one down.
- Going to the gym is much easier when you pack your bag the day before. Don't wait for the last minute to start planning for retirement.
- Be sure to take advantage of 401(k) plans offered by your employer or start contributing to an IRA or Roth IRA.
- If you can, contribute 10-15% of your salary to your retirement account.
- You can even increase your contributions gradually to help you and your budget adjust.