Your idea can be any money management habit that you think could be helpful to others. We will share those ideas—and give you recognition for them—all through 2008.

The December 2007 Challenge

We wrap up the 2007 Challenge by circling back to the beginning of the year. You may recall that the first thing we did was to calculate net worth to set a baseline. Now you get to see the rewards of all the small habits you've developed this year by again calculating your net worth.

You may be in the habit of measuring financial progress by the growth in your paycheck or by looking at your tax return and your taxable income. That won't work. Your net worth can decline even if your paycheck goes up, so don't gauge financial progress by your wages. For example, you might earn more money in a year that you also buy a new house. You now have a debt that offsets your raise.

But when you buy a house, as you pay off your mortgage and your property appreciates in value over time, your home equity—along with your net worth—grows.

You build net worth when you reduce debt and when you save and invest. The goal of the Financial Fitness Challenge has been to help you build wealth by making good habits.

The biggest idea we wanted to share during the Challenge--with the support of the people at your credit union—is that you can do this. Personal finance can seem complicated and intimidating. But the truth is, the basic elements of money management are within anyone's grasp.

Basic maintenance

You can take two simple steps at this time of year to ease your financial stress.

• One, set up a holiday club account at the credit union so you can face the holidays next year with cash in hand. Look at this year's holiday budget—not only gifts, but special foods and beverages, postage for cards, cards, holiday wardrobes, travel—and decide if that's a total you want to maintain next year. Divide by 12 and you know how much to put aside each month to reach your goal. Use direct deposit and automated transfers from checking to savings.

• Two, use your employer's health-care flexible benefit credits by the use-it-or-lose-it deadline. For some companies, that deadline is Dec. 31; some extend the credit period until March 15. Know which limit your employer plan observes, then be sure not to leave money on the table. Many over the counter products now qualify for the benefit, in case you're looking for ways to use up excess dollars.

Thanks for participating in the 2007 Financial Fitness Challenge; we have enjoyed bringing it to you. As one reader told us, "This is a great program with tips on financial services." That's what you can expect from your credit union.

Cheers!

ST
Susan Tiffany, CCUFC
askem@cuna.coop

Published December 4, 2007, Reviewed January 14, 2008

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