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Financial Success is a Lifestyle Choice

Meridian Points

financial-success-is-a-lifestyle-choice

It’s tax time, and if you’re like almost one-third of Americans, you’ve waited until the last two weeks before the April 18 deadline to start your 2015 return.

Finding last-minute ways to lower your tax bill is always a big part of the crunch. But the truth is that most tax-saving strategies need to be done before Dec. 31. Tax planning is not an April 15 endeavor.

This scramble reminds me of a crash diet before a beach trip. We know that long term, diets don’t work. Healthy lifestyle changes do. That means making gradual changes that you can live with, developing habits that stick even after you’ve reached your goals.

Financial habits are no different. Using credit cards to live beyond your means, living from paycheck to paycheck, paying bills late, and scrimping on savings are tough habits to break. Achieving your long-term financial goals is as much about adopting healthy financial lifestyle habits as it is about money. Money alone is not sufficient. If it were, the majority of lottery winners wouldn’t be bankrupt within a few years of receiving enough money to last a lifetime.

Good financial health means saving and living within your means when everyone around you seems to be buying and spending. Resisting the temptation to use debt to finance your lifestyle will free up cash flow for financially responsible uses.

For a quick checkup, ask yourself the following questions:

What is your net after-tax income? By this I mean the amount of money that is available to save and spend. This is the amount of money you have after taxes and items such as insurance and 401(k) contributions are deducted.

Do you live below your means? You will never know unless you maintain a budget that tracks your income and expenses on a regular basis.

Are you saving? There is no way to reach your financial goals unless you save 10 percent to 15 percent of your income. The good news is that contributions to your 401(k) plan count. The bad news is that we all need to save money in addition to our 401(k) contributions.

Do you know how much debt you have? This knowledge allows you to create a plan to reduce or eliminate your debt and adjust your budget accordingly.

Do you plan for major expenditures? This is the best way to avoid accumulating debt.

Do you regularly review your investment portfolio? You should analyze how it is invested and how much you and your employer are contributing to it.

A key to long-term financial health is checking in regularly to make sure that you’re on track, and identifying where adjustments are needed. Try to break down the job of examining your financial health into quarterly or monthly tasks instead of the overwhelming job of reconciling every aspect of your finances at once.

So get organized. Write down your goals. Be disciplined, but don’t forget to be generous. Your financial life is happening now, so actively participate.

This column was featured in the March 6 Knoxville News-Sentinel. You can read it here: Financial Success is a Lifestyle Choice

Meet the Author

Tom Coulter, CPA

President

Tom is the President and a founder of Meridian Trust. Tom graduated from The University of Tennessee, Knoxville, in accounting with honors, in 1978. Tom previously worked for the international accounting firm, Deloitte. He later joined the financial medical advising firm, FIS Associates, before founding Meridian Trust in 1997. Tom has worked extensively in retirement planning, taxation, estate and financial planning and investment management. He is a Certified Public Accountant, a member of the American Institute of CPAs (AICPA), and the Tennessee Society of CPAs (TSCPA).

Tom is also credentialed as a Personal Financial Specialist (PFS) by the AICPA.