By STEPHANIE FAROH
Extension Educator, Purdue Extension Kosciusko County

A common New Year’s Resolution is to get physically fit, but many also have a goal to get fiscally fit this year. Have you reviewed your finances for 2015 yet?

A new year is a great time to set financial goals that can pay off years from now. Focusing on your economic health pays big returns on your physical health too.

Start with a budget and keep it simple. Once you understand your monthly income and expenditures, you can make better plans to save or invest. Treat your savings like an expenditure and pay yourself as much as comfortably possible. Every little bit helps. The Federal Deposit Insurance Corporation lists great tips to help with a financial checkup.

Here are some questions they recommend asking yourself:

• What are my current short-term and long-term financial goals? Write them down. They may include paying off a debt, buying a home or a car, or financing a child’s college education. With goals and target dollar amounts in mind, you may be more motivated to save money and achieve your objectives.
• Can I do better making automatic transfers into savings? Arranging for your bank or employer to automatically transfer funds into savings or retirement accounts is a great way to build savings, but don’t just set it and forget it. Ask yourself whether you should increase the amount you are automatically saving.
• Do I have enough money in an emergency savings fund? The idea is to cover major unexpected expenses or a temporary reduction in income without borrowing money. Figure out how much you would need to pay for three to six months of essential expenses such as housing, transportation, medical costs, etc. If you don’t have that much money in a savings account, start setting aside what you would need. For anyone struggling to build a “rainy day fund” or reach any major savings target, setting up automatic transfers is a steady way to work toward that goal.
• What about retirement savings? Start by calculating how much money you will need for retirement, perhaps by using an online estimator or speaking with a professional. According to the Social Security Administration, most financial advisers say to aim for a combination of Social Security payments, pensions, and personal savings that equal at least 70 percent of your pre-retirement earnings in order to maintain your pre-retirement standard of living. Even if you are just starting out in the working world, look into all your retirement savings options, as they may come with tax savings and employer matches. And, if you are self-employed, find useful information from the IRS at www.irs.gov/Retirement-Plans/Retirement-Plans-for-Self-Employed-People. To estimate your Social Security benefits when you retire, you can contact the SSA at (800) 772-1213 or go to www.socialsecurity.gov/estimator.

Reviewing your finances each year is a great way to stay fiscally fit. Here’s to a healthier you!