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Experts Weigh in on Key to Financial Fitness

We asked some top advisors what their advice is for being financially fit. Here’s what they shared with us. How many of these can you tick off?

It’s about the flow. Watch your cash flow and live within your means—that’s the starting point. Once that’s under control, plan for the future, including what if something happens to you. What is the impact of that on those left behind and especially if there is debt left behind? That’s where life insurance comes in.

—Aurora Tancock, CFP, FLMI, AIAA, president of Aurora Tancock Financial Services

Set goals. Just as exercise becomes a key tool to achieve health goals, life insurance is the same in your financial fitness program. Among the many goals you can achieve through life insurance are: saving for future projects, plan for retirement and protecting the financial well-being of your family.

—Ana Sofía Rodríguez D, M.B.A., associate director of Grupo Inverseguros

See no evil. Make sure you can leave your family no worse off than they currently are. A lot of people are insurance poor. There’s nothing evil about insurance. It allows your family to maintain same standard of living that they’re accustomed to if something were to happen.

The second is to buy products before the need is there. If you can’t afford all of what you need, start off with what you can afford. For example, start with term life insurance, instead of permanent, and then when you can, change it to a permanent solution.

—Corry Collins, CFP, ChFC, CHS, of Maritime Wealth Management

Get help. I would suggest people start working with an advisor as soon as possible. It’s much easier to fix the financial “mess” of 30-year-old than a 55-year-old. And then, don’t let life get in the way of keeping up with your plan. I think annual reviews are great for keeping people on track.

—Jennifer Mann, LUTCF, CLU, ChFC, CFP, vice president of the Chicago office of Lenox Advisors

Give it a dry run. I’d ask, “Do you have a spending or savings plan?” You need something to help you understand if you are spending more than you’re earning and whether you’re saving enough. It’s great if you can get on a spending plan and stick to it and reevaluate it periodically.

Then reduce and eliminate your debt—but you’ve have to want to do it! Remember, 98% of the people work for 2% of the people. The lenders are the ones you’re working for.

Then have a dry run, what happens if … You have to go through your plan to see if you have enough life insurance, disability insurance, long-term care … what are the survivor needs going to be? etc. and then create a plan to live on that budget, so you can fund the things for later. By saving to today, you can have your earnings pay for your salary later.

—Ed Skelly, ChFC, CLU, RICP, RFC, founder and president of Sterling Financial Partners

 

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