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Six steps to a healthier financial life


We're often reminded of ways to improve our health — like eating less fat or exercising more. These reminders are beneficial and important. We also need to think about our financial health. Here are six steps for you to consider:

1. Figure out where you are today.

It's crucial to know where you stand. List your assets and liabilities. Know where all of your accounts are. For asset accounts, including your retirement savings, know the balances and how they are invested. For debts, know the balance due, the interest rate and when that debt will be paid off.

2. Know where you are going.

Decide on a plan for the future. Dream about the future and set some goals. Make your goals realistic and achievable. Make sure the goals are measureable — in other words, how will you know when you reach the goals? What do you need to do to financially to achieve those goals?

3. Make saving for retirement a priority.

You will likely spend 20 or more years in retirement, so plan for it. Save an adequate percentage each month, gradually increasing the percentage each year. Most planners suggest at least 10 percent of your pay for retirement savings.

4. Balance the budget and pay off existing debts.(That assumes you have a budget. If not, make one.)

Make sure your spending is in line with your income. Get rid of consumer debts. As long as you have those debts they impose some level of control over your life. You'll never have financial freedom as long as you are a slave to debt. For some folks, the only way this will be achieved is to cut up the credit cards — or at a minimum, leave the credit cards at home to have only in case of emergency.

5. Monitor your progress at least once a year.

Are you making progress or are you getting into deeper financial trouble? If you're behind in your savings or debt reduction goals, take the necessary steps to address those areas. If you don't you'll be facing major "financial illness" in the future.

6. Last and most important, as you do all these things, make sure your handling of money reflects your Christian commitment.

This includes your tithes and offerings. And after your taxes and tithes, it includes making sure how you handle the remaining funds reflects your Christian values.

Don Spencer is Kentucky Baptist Convention Church Financial Benefits Counselor.

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