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Resolve to make 2017 a year of financial fitness

Adopt regular, habitual practices in 2017 to improve your finances, Mark Daly says.
Adopt regular, habitual practices in 2017 to improve your finances, Mark Daly says. Pittsburgh Post-Gazette

I pulled into the gym parking lot at 5:30 a.m. the day after New Year’s, and guess what? It was packed. All those resolute folks were there to fulfill their annual pledges to exercise, lose weight or buff their muscles.

It made me think about financial fitness — the regular, habitual actions that lead to fiscal serenity. Can we apply that same New Year enthusiasm to achieve monetary fitness goals in 2017?

The list of opportunities for fiscal improvement is long, but don’t be intimidated by limited cash flow that prevents trying. As my group cycling instructor reminds me, small daily improvements in diet and exercise lead to life-changing results, so get started. The miracle of compounding, prudently invested in growth assets, is by far your best friend.

Start by paying down debt, the most productive investment you can make. Debt is not inherently bad, but it does divert cash flow from the individual to the lender — money that could be used for other things, like saving.

How about funding a Roth IRA, or converting a traditional IRA to a Roth? Think about saving after tax so you’ll have an already taxed pot of money when you retire. Begin with a simple budget that matches income with expenses, and carve out enough to fund your retirement plan.

Fund a 529 college savings plan for a child or grandchild. Most states offer tax advantages to the donor, and the money grows tax free if eventually used for qualified education expenses.

Assess insurance needs, including life and health, to make sure you have the correct coverage for your needs, but don’t overpay for coverage you may not need. Price competition, especially for term life, is intense, and you may be overpaying on that old policy. The same could be said of some annuity contracts.

Ipsos Public Affairs just conducted a survey for a major insurance company. The study reveals that 43 percent of Americans are optimistic about their financial situation, compared with 31 percent of those surveyed in 2011.

Let’s all resolve to accomplish one or two financial fitness goals in 2017, what Dave Ramsey refers to as the “baby steps.” In the meantime, I’m late for spin class, hoping to grab that last broken bike in the back row. Fortunately, this will not be a problem in a few weeks.

Mark Daly is managing director, investment officer, Daly & Vachek Investment Consulting Group of Wells Fargo Advisors. dvicg.com; 333-1433. This column appears in the January 18-February 14, 2017, of the Idaho Statesman’s Business Insider magazine. Click here for the e-edition (subscription required).

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