Analyze Spending Habits

The first step to financial fitness is to learn to live within your means. Spend less than you earn. Stop the bleeding.

When you begin a program like Weight Watchers, some leaders suggest you keep a food journal to chart how you spend your calories, i.e., points. Write down not only what you eat, but how much. Note your mood and who you were with when you indulged.

Keeping a spending journal is a good way to get started on a financial fitness plan. Write down everything you buy, including tips, loans, and coins tossed into wishing wells. Also note your mood when you spent the money. Do you use any excuse to celebrate? Do you indulge in retail therapy when you're feeling down?

And who were you with when you overspent? Do certain colleagues entice you to eat lunch out instead of choking down that sandwich you brought from home? Do you buy more at the grocery store when a child or a hungry spouse accompanies you? Do you purchase flashier possessions just to impress the neighbors? Do you have some friends who always seem to come up short when dining out in a group, and thus expect others to subsidize their share of the tab?

Until you know where your money goes and what triggers cause you to part with it, you may find it hard to get a handle on your spending habits. And controlling spending is essential to growing wealth.

What tips do you have for controlling spending? I would love to hear your comments.

Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy 

Weight Watchers Approach to Financial Fitness

I'm now celebrating over 10 years of being a Lifetime Weight Watchers member. As a Lifetime member, as long as I weigh in at least once a month, at goal weight or below, I can attend meetings and participate in the program without a paying fee. For a frugal person like me, "free" is excellent motivation to maintain my goal weight year after year.

Unlike many "diets" I've tried in the past, Weight Watchers is a way of life, focusing on making small, permanent changes in eating and exercise habits. Since nothing is completely off limits with Weight Watchers, you don't have to deprive yourself of the favorite foods you crave. You just have to learn to savor them in moderation, or find acceptable substitutes that are healthier choices.

From "points" (which was what they were called when I joined) to "PointsPlus" to the new "SmartPoints," Weight Watchers allows you to budget your food intake in the most satisfying manner while following good health guidelines.

Managing your weight with a program like Weight Watchers is similar to achieving financial fitness through small, permanent changes in spending and saving habits. You lose weight by burning more calories than you take in; you grow wealth by spending less than you earn. By using your money only on the things and experiences that add value to your life, you can shrink your financial footprint and steadily build wealth.

When you increase exercise, you firm up your body and make the most of your slimmer shape. When you invest your savings, you have the opportunity to grow your wealth faster.

Crash diets, austerity programs and get-rich-quick schemes may promise spectacular results, but making habit changes you can live with long-term achieves results that will stick.

What small changes can you make to achieve financial fitness?

Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy 

Making the Most of Charitable Deductions

One of the more popular end-of-the-year activities is to make charitable contributions. Donating to charity is a win/win: the donor may receive a tax deduction, and the charity collects much-needed funds. But charities need money year round, and you can ease your pocketbook in December if you spread your donations throughout the year.

Many charitable organizations allow, and in fact, encourage donors to set up recurring donations. You can have a designated amount automatically transferred from a bank account or charged to a credit card at a designated interval, such as monthly or quarterly. Recurring donations help charities better plan their programs, as well as allow you to budget your support for causes you care about.

In order to deduct charitable contributions on your tax return, you must file Schedule A of the 1040 form. The contributions must be to a qualified charity, such as a religious or government organization, or a nonprofit group with 501(c)(3) status. You must keep a record of what you've given; for example, a canceled check, a receipt from the organization, bank or credit card statement naming the organization, date, and amount.

Many charitable organizations desperately need volunteers as well as donations. If you do volunteer work, keep receipts for any unreimbursed out-of-pocket expenses you incur in the course of this work, as well as a log of mileage you've driven in your own vehicle on behalf of the charity. Don't worry if you forget to write down your mileage at each stop; fill in the gaps later with MapQuest or Google Maps. The important thing is to keep track of the date, destination, and purpose of the trip. If you volunteer regularly, these expenses add up, and tracking them will enable you to increase the amount of your charitable deductions on next year's tax return. Start today!

What charities do you support? What tips do you have for making the most of charitable deductions?

Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy 

Starting down the Road to Financial Fitness

Next to weight loss, financial fitness is one of the most popular resolutions made each new year. If shrinking your financial footprint and improving your bottom line are part of your 2016 plan, here are five tips to help you get started:

1. Most people know the best way to lose weight is to burn more calories than you take in; financial solvency comes when you spend less money than you bring in. Start with low-hanging fruit: eliminate expenses that add no value to your life, such as late fees, unnecessary or duplicate purchases, excess interest on debt. Spend your money on the things and experiences that truly enhance your quality of life.
2. Eliminate waste. Put extra holiday cards, wrapping paper, and bows where you can find them next year so you won't have to re-purchase as much. Turn your thermostat down as far as you can stand it to save energy. After all, it's winter, so put on a sweater instead of running around the house in shorts.
3. Eliminate clutter. How many times have you bought an item when it turned out you already owned something similar? How much food has to be thrown out because it was forgotten in the back of the refrigerator until it rotted? Take inventory of what you have, and get rid of what you don't need. If you received gift cards this holiday season, use them promptly. Exchange items that are the wrong size or otherwise unsuitable. Donate usable unwanted items to charity for a tax write-off.
4. Speaking of taxes, it's time to start organizing your paperwork. Make sure you take advantage of every deduction or credit for which you are eligible by locating receipts and ensuring that mileage logs are up to date. If you have a refund due, file as soon as you have all the necessary documents, such as W2s and 1099s. If you must pay the IRS, you can wait until the beginning of April to file your return, but at least it will be ready so you won't get stressed out--and perhaps owe a penalty for filing late.
5. Get started on investments. If your employer has a 401k plan or similar, contribute as much as you can, certainly up to any company match. Think about contributing to an IRA (Individual Retirement Arrangement) as well. If you can't fund the whole allowable amount at once ($5500, or $6500 if you're over age 50), some institutions will let you contribute in installments. And it's not too late to open an account for 2015; you have until April 15 to make that contribution.

Small adjustments to spending and wealth-building habits add up over the long term, and they stick better than a crash-diet-style change.

What resolutions have you made for 2016? What tips do you have for keeping them?

Live Cheaply, Be Happy, Grow Wealthy