Improving Your Financial Health: A 10-Step Workout Plan

1. 30 reps of cash

This one is easy. Every morning, wake up and immediately log in to your checking/savings accounts. This is a great healthy habit that accomplishes a handful of things. For starters, it gives you a gut check as to your daily cash position. This can help you make financial decisions on purchases, money transfers, etc.

Additionally, in today’s cybercrime onslaught, you can see if any nefarious activity is happening in your accounts. Usually, if you catch it right away, there is a very good chance the banking institution will refund you the stolen money.

2. Four cash cleans a year

Another simple cash tip: If you tend to keep a decent amount of cash on hand, you should likely have a portion of it in a liquid savings account. Every quarter, it is worth seeing if that savings account is paying you competitive rates. For reference, today you should be seeing savings rates at 4% to 5%.

If you are not, I’d highly consider looking around and opening an easy-to-use account with an online bank. This way, your cash reserves will have some earnings and thus be all around healthier.

3. Credit card curls

If you are using credit cards, there are plenty of good regular tips here.

•  Check them weekly to make sure you understand what you are spending and to see if any unauthorized transactions have occurred. Much like your cash accounts, if you catch these quickly enough, almost every credit card will end up refunding you. Plus, you can stop it in time before they really get away with doing serious damage.
•  If you have credit card debt, it is critical every month to see what your outstanding balance is, how much interest you are paying and which debt to overpay first. It is absolutely essential to have a steady and consistent plan to pay down these debts each month.
•  Points are the last thing I’ll comment on here. Once a month, I’d look at the charges and see if you are maximizing your credit card rewards. Many of these cards offer different promotions, different rewards and different incentives. If you want to maximize your “free” money, keep a steady eye on using your cards correctly.

4. Investment kickbacks

There are a few healthy things to focus on when it comes to your investment health. First, on a monthly/quarterly basis, it is worth understanding what you have and where. Also, are your accounts trending in the general direction of the markets? If markets are up 20% and you are down 10%, it’s time for a new routine. However, if they are trending in a similar direction as the markets, then you are likely on course.

Additionally, are you comfortable with your overall risk allocation? It makes good sense to check your risk allocations, likely quarterly, to align them with your risk tolerance.

5. Retirement account squats

I’d say monthly it is worth logging in to your 401(k) or IRA and making sure you are on track to contribute your desired amount. Remember, limits go up each year, and you want to make sure, if you are able, that the percentage being allocated is enough to max out each year.

Additionally, do an audit to ensure you are getting the appropriate match dollars on your contributions. These two things will keep you on cruise control for your financial health.

6. Mortgage mile

As we know, paying off one’s mortgage is a daunting task. A big debt like a mortgage hanging around their necks is also one of the things that most bothers people. Do yourself a favor once a month: After you pay your mortgage, log in to check your new balance. It is therapeutic to watch the balance go down each month.

In addition, you can decide if you want to round up each month or throw a few extra dollars at the balance.

Simply having a pulse on your mortgage will help you feel more comfortable with your payoff date and take a level of ownership you likely didn’t have before.

7. HSA hustle

My favorite vehicle is the health savings account! On a monthly basis, I’d suggest making sure you are trending to max out your HSA contributions for the year. These are some of the best dollars to stow away, thus I want to make sure you are taking advantage of every last bit. I would also take stock if there is an investment account option within your HSA. If so, do your best to keep the appropriate amount there vs. in your cash portion for medical expenses. (Read about the Record-High HSA Limit Coming for 2024.)

8. Expense push-ups

You know how they say if you write down and journal everything you eat, you’ll be much healthier? Well, that’s what can happen if you do the same with your expenses. Depending on how much you believe you would benefit from a detailed accounting of your expenses, I’d suggest doing this daily to weekly.

The good news is there is some easy-to-use software that can track this for you with little work on your behalf. That said, these technologies do need some TLC to stay accurate.

In the end, if you have a good pulse on where your money is going, you will be the master of your domain!

9. Modeling mountain climbers

I’d recommend running full-on financial modeling once to twice a year. This is a great use of our resources and something we love doing here at Diversified, LLC.

You’ll be astonished at what regular modeling can do to your finances. It will give you confidence that you are trending in the right direction and provide a clear snapshot of your entire financial picture.

If you are not trending in the right direction, it will give you actionable steps to get you back on the right track. It can also motivate you to make the changes necessary to help make all your dreams come true.

10. Take a rest

Much like working out physically, even your financial health needs a break. You certainly don’t want to neglect it, but don’t beat yourself up too badly if you are a slow starter or need a little extra help. That is what we are here for, to take some of the onus off of you and also to keep you encouraged so we can accomplish these goals together. Also, all work and no play makes Jack a dull boy.

In other words, you don’t need a six-pack and chiseled biceps here. Sometimes good enough is OK. Thus, although this is serious stuff, you’ll have that proverbial doughnut, you’ll skip a workout, and sometimes you simply need a break. I’m here to tell you that is fine and dandy. As long as you have a steady pulse on the above, you can certainly afford to take a break.

Your financial health

It is amazing the difference I see in people once they have a pulse on their financial health. They’re as different as night and day.

One note of warning before I let you go: If you are taking on newfound ownership of your finances, please don’t get discouraged or anxious. Markets, cash and finances are not a straight line. They will ebb and flow on a month-by-month basis. Don’t let this discourage you, and don’t overreact to it. Keep up with your workouts!

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.