Your Financial Fitness Program: Four Easy Steps
By now everyone should know that part of a healthy lifestyle includes being physically fit. How many of us realize we also need to be fiscally fit? Here are four easy steps to get you started on your financial fitness program.
Step 1: Complete Fiscal Exam
Knowing what you are working with is the first step to a financially fit lifestyle. Assess your income, expenses and current credit condition. Create a budget and review your credit report every year. You are entitled to a free copy of your report annually from each of the three consumer credit reporting agencies (Experian, Equifax and TransUnion) and should request them through the Federal Trade Commission’s authorized website, www.annualcreditreport.com.
Address any inaccuracies immediately so that they will not affect your cost of borrowing. Conduct a complete review of your credit card and loans; you should know the interest rate for all of these items. Once you assess the rates, contact each provider and negotiate a better rate. Explore a tax-deductible option to current debt, such as a home equity line of credit where interest may be tax-deductible, by consulting with your tax advisor.
Step 2: Select Your Work-Out Facility
Work with a financial institution that understands your industry and is dedicated to helping you attain your financial goals.
REALTORS® Federal Credit Union is a Division of Northwest Federal Credit Union. This means that we have the stability and backing of a 68-year-old credit union with more than $2.8 billion in assets and more than 180,000 members nationwide, which allows us to provide a full array of products and services.
Most importantly, REALTORS® Federal Credit Union is committed to helping you create financial independence. The Credit Union was founded by NAR and is made available to members and their families through the REALTOR® Benefits Program to offer products and services to help them save money on banking.
At the Credit Union we know that real estate professionals need to establish good business habits by having a separate checking account for their business. By understanding the challenges you face not only in your business, but also in your personal financial situations, the Credit Union’s products and services are designed exclusively to meet your needs.
Step 3: Commitment
Commit to a balanced financial fitness program that creates a disciplined routine. The program you select should include allocations for operating expenses, taxes, retirement and savings. Creating secondary savings accounts for these items will aid in the process. That combined with direct deposit and recurring deposits into these accounts will help in your success.
Committing to your financial fitness program is easy and should provide the results you need when it comes time to pay taxes, dues and other business expenses.
Step 4: Establish a Training Team
While you likely have a specialty in real estate, you should establish a training team of experts to develop your financial fitness program. Your training team should include experts in tax planning, investments management and estate planning.
- Hire a tax advisor with industry experience to guide you in maximizing deductions. Also ensure you have established the best tax entity for your business. Make regular contributions to your tax savings account so that you are prepared for your quarterly and annual tax bills.
- Establish investment goals by developing a plan with a financial advisor, and commit to reviewing the plan with your advisor once a year.
- Ensure that you have three primary estate planning documents: will, medical directives and durable power of attorney. These documents should be reviewed every three to five years or after a life-changing event.
Following these four steps will help you slim down your debt and pump up your saving power. Evaluate your full financial situation to know where you need to focus the most energy. Research the best financial institution that not only meet your needs, but also knows how to continue to help you build a stable financial future.
Commit to the changes and turn them into habits while utilizing your training team for support. Get the best services and advice from individuals who are experienced in their fields. Your financial fitness plan depends on knowing your situation.
With a regimen that includes a financial institution dedicated to you, a commitment to a financial fitness plan and a training team, your regimen can lead to an impressive financial physique.
Victoria Gillespie, MBA, is a licensed REALTOR® in Maryland and Senior Vice President for REALTORS® Federal Credit Union. For more information on the Credit Union, visit www.realtorsfcu.org.
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