New Year’s Resolution: 3 Easy Tips to Be Financially Fit in 2014

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in Cash Injection Tips, Part Time FD London

Here are three simple tips to help keep you financially fit in 2014.

No. 1: Open Your Statements

Facing your finances begins with opening all of your account statements — bank, credit card, mortgage account. Take a snapshot of your finances so that you may set priorities about what to do next.

Here is a process that I recommend:

Write it down. Set three goals that are realistic and achievable over the next 12 months. Whether you choose an online tool or composition notebook, figure out where you will record and track your finances and goals.

Set a Schedule. Mark your calendar to review your finances regularly. It is at these times when you can set or make changes to your three goals.

No. 2: Reduce Fees

From credit cards to your investments, you need to identify where improvements can be made and set your plan in motion to make changes that can positively impact your financial bottom line.

No. 3: Cut Your Losses

Follow the old trading adage, “Cut your losses and let your profits run.” When performing a review of your portfolio holdings, look at what you own. Do you own individual stocks, bonds, mutual funds, and/or exchange traded funds (ETFs)? Make an assessment whether you are adequately diversified. That is, make sure that you are not too heavily exposed to a single stock or sector. Next, take a look at where your gains and losses are. While your portfolio should aim for diversification in order to control risk, it is my experience that it is a good practice to cut losses. Sell out of things that are not working and redeploy those funds elsewhere. By upgrading on a quarterly basis, you are also controlling risk by making sure that no single loss grows too big because you were not paying attention. If you really love a specific company or fund, you can always buy it again later.

That?s it. Keep it simple and achieving your financial goals can be as easy as 1-2-3. I wish you a prosperous and healthy new year!

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