Your investments: It’s time to get fiscally fit

Recent study published by Wells Fargo showed that not only are individuals nervous about their finances, but they decline to talk about them with their spouse.

Shekels money 370 (photo credit: Ariel Jerozolimski/Bloomberg)
Shekels money 370
(photo credit: Ariel Jerozolimski/Bloomberg)
The Tel Aviv Marathon is on Friday. In Jerusalem, the excitement is building for the city’s marathon coming up in less than a month. Go outside and you are bound to see people of all stripes running. I think back 15 years, and I feel like I was running around the capital’s Gan Sacher all by myself. How times have changed.
Personally, as an avid runner, I love it. There is a new culture of physical fitness that is sweeping the country, and that’s a great thing. If only the locals would smile and say “good morning” as they pass in the opposite direction, it would feel like my days of running on Alki Beach back in Seattle.
While all is great physically, it’s the fiscal fitness that’s a bit more problematic – especially when it comes to communication.
A recent study published by Wells Fargo showed that not only are individuals nervous about their finances, but they decline to talk about them with their spouse. In fact, the study concluded that it’s easier to speak about politics or death than it is to speak about finances and retirement.
“Although people find it easier to talk about politics and religion over money, that doesn’t mean financial concerns are not top-of-mind,” the report said. “Two in five (39%) Americans report that money is the biggest stress in their life, 39% say they are more stressed about finances now than they were last year, and a third of Americans (33%) report losing sleep worrying about money. When asked what they would do differently if they could go back five years, more adults cite regrets about saving and spending (49%) than about shortcomings in all other areas of their life, including taking better care of their physical health, diet and fitness (42%), pursuing different personal relationships (21%) and working more to improve their career (16%).”
Just start The study also pointed to a certain confidence responders had regarding making it through the month versus a fear vis-à-vis retirement.
“A majority of Americans feel financially healthy when addressing their basic needs, but feel less so when trying to control spending and saving for retirement and emergencies,” the report said. “Two-thirds (67%) feel in financially good or great shape with regards to paying their monthly bills, and over half (56%) feel financially good or great in their ability to live within their means. However, only 40% feel financially good or great about their amount of discretionary spending and about their “rainy day” savings. Only a third (33%) described feeling good or [in] great shape [about] their ability to retire comfortably.”
Much like exercise, the only way to save for retirement is to actually start. It’s without a doubt the hardest part.
Saying that you are going to live on a tighter budget to fund retirement savings isn’t something that many want to do, but it’s crucial.
Live within your means In today’s commercial-driven society, the temptation to spend money is overwhelming. How many of us “need” to have the latest product from Apple? Or have to fly to Europe for a winter skiing trip because our neighbors did so and our children will be envious if we don’t go? There is nothing wrong with spending money on gadgets or trips – as long as you actually have the money to spend.
By keeping track of all income sources, and then figuring out a budget based on that income, you will successfully be able to live within your means.
Start saving While this may seem obvious, the need to institute a disciplined savings plan is paramount to getting your finances on the right track. I can’t tell you how often I hear, “I have my whole life to save, I don’t need to start now. I’d rather buy a new car, and in a few years I’ll start.”
Each year that passes with no investment will impact your retirement. Assuming you have 20 to 30 years until retirement, every year you forgo saving or investing money today will subtract one to three years from your retirement.
Use the upcoming marathons for inspiration. After you lace up those dusty shoes and run around the block, sit down with a pencil, paper and your spouse and get your finances in shape.
The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc., or its affiliates.
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Aaron Katsman is a licensed financial professional in Israel and the United States who helps people with US investment accounts. He is the author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing.