January is Financial Wellness Month

Are you financially healthy?

January is a time for new beginnings and setting goals. Many of us are determined to take some time out of our busy lives to reflect and plan for what lies ahead. One of the most important things to evaluate is our finances. Financial Wellness Month reminds us to maintain healthy money management habits.

When it comes to examining your personal finances, consider these four overarching actions to help you establish a financial strategy for 2018:


Before you start putting together a budget, it’s a good idea to track your spending habits over several months to get an accurate look at where your money is going. Use a simple spreadsheet or a personal finance app to calculate what you spend and where. Group your expenditures into categories such as reoccurring bills, groceries, eating out, entertainment, etc. After you monitor your spending habits over a period of time, you can determine where you might be able to cut back, if need be. This will also give you a monthly budget to work with moving ahead. Continue to track your spending so you can see if you’re on course with your budget.


Creating an emergency fund for unexpected life expenses is one of the most important reasons to save. Another reason to put money aside is to fund short-term projects or purchases. For example, you might want to remodel your kitchen or save up for a vacation. Start by determining how much you need to save and then create a schedule for how much you will put away each week or each month and track your progress. Do whatever works best for you to keep this money separate from your spending change. You might consider putting the funds in a separate bank account or keeping the cash tucked away. Implementing a regular saving schedule will prevent the need for financing options later.


The purposeful use of debt is undoubtedly one of the more controversial financial planning topics. Most of us use debt to buy a home, which is generally recommended as long as the amount is reasonable. Beyond that, try avoiding debt whenever possible. It is far too easy for debt to get out of control and that can have disastrous effects on the lives of families who have too much of it.


Investing is a powerful tool used to build wealth and save for the future, yet nearly half of all American families have nothing saved for retirement.  Whether you're making $50,000 a year or $200,000 a year, putting money away is a challenge. The sooner you start saving for retirement, the better. Time is on your side when you start early, thanks to the power of compound interest. Even if you’re well on your way to retirement age, there’s no time like the present. The most important thing is to start somewhere.

There are several types of investment accounts that can help you save for retirement. The most common are 401(k)s and IRAs.  Here’s a quick overview:

  • A 401(k) is a tax-deferred, employer-sponsored account. Meaning, you will pay taxes on the money only when you withdraw it. You can contribute up to $18,500 each year to your 401(k), with catch-up contributions allowed for those over 50.
  • IRAs are also tax-deferred, but are not offered through your employer, and you have full choice of where your investments are made. You can contribute up to $5,500 each year to IRAs ($6,500 if you are over 50). If your employer doesn’t offer retirement benefits or if you are self-employed, you might consider an IRA to save for retirement. Note that there are several different types of IRAs – including a traditional or Roth IRA. Each plan has different rules regarding taxation and withdrawals. Speak to your financial advisor to determine which plans work for your situation and always consult a tax advisor to understand all of the associated tax benefits and implications .

Remember you will have to pay taxes on any withdrawals made before the age of 59 ½ and you may have to pay a 10 percent penalty.

Successful money management will not only make you feel good about having your finances under control, it will also ensure both your short-term and long-term financial wellbeing.

Stephen Stribling is a Financial Advisor with the Global Wealth Management Division of Morgan Stanley in Denver.

The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives.  Investing involves risks and there is always the potential of losing money when you invest. Tax laws are complex and subject to change. Morgan Stanley Smith Barney LLC (“Morgan Stanley”) , its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice and are not “fiduciaries” (under ERISA, the Internal Revenue Code or otherwise) with respect to the services or activities described herein except as otherwise provided in writing by Morgan Stanley and/or as described at www.morganstanley.com/disclosures/dol. Individuals are encouraged to consult their tax and legal advisors (a) before establishing a retirement plan or account, and (b) regarding any potential tax, ERISA and related consequences of any investments made under such plan or account. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management, or its affiliates. Morgan Stanley Smith Barney, LLC, member SIPC.  CRC 2004164

Categories: Finance