At least once a year you should take the opportunity to reevaluate your financial goals and your progress towards reaching them. Here are some sensible ideas to help improve your chances of achieving financial success.

Take good care of yourself. For most of us, our greatest financial asset is our ability to earn a living. Eat healthy, exercise and keep improving your career skills. For those approaching retirement or already retired, staying fit and healthy should be your most important priority. It is essential for an enjoyable and successful retirement, and lower medical costs means more money for the things you want to do.

Organize your financial affairs. First, establish your goals. Prioritize them by importance; determine when you want to reach them, estimate how much they will cost, and what you’ll need to save each month.

Second, determine where you stand today financially. You can’t develop a plan to reach your goals if you don’t know where you’re starting from. This is the only way you can make sound financial decisions. Constructing cash flow and net worth statements will enable you to do this. The cash flow statement tells you what you earn and spend and how you earn and spend it. Look for non-essential expenses that can be reduced or eliminated. The net worth statement is a snapshot of what you own and what you owe. The difference between the two is your net worth. Comparing your net worth annually will give you an idea of how well you are progressing toward your goals.

Third, establish a recordkeeping system for your personal and financial documents. Keep it simple, easy to maintain and accessible, so you or your family can quickly access important paperwork.

Knowing what you want to accomplish, where you stand financially, and the location of important documents will save you time, giving you a sense of control and peace of mind.

Save aggressively and wisely. Spending less than you earn and saving and investing the rest is the most powerful wealth building tool we have under our control. We can’t predict investment returns or inflation, but we can manage our spending.

Create a priority for how to direct your savings. If your employer retirement plan offers matching contributions, take advantage of it. This is “free” money and it grows tax-deferred. You won’t get a better deal anywhere else. If you still have additional savings, pay down any high interest debt. Eliminating snowballing interest and finance charges will likely yield a better return on your money than any investment. Once you get a handle on your debt, start directing some of your savings into an emergency fund so you are prepared for unexpected expenses or a job loss.

Invest Sensibly. Use your savings to build a low-cost, broadly-diversified, tax-efficient portfolio that is consistent with your goals and investment temperament. You will get to keep more of your investment returns rather than wasting them on unnecessary commissions, fees and taxes. You will also be more likely to stick with your investment plan through good times and bad.

Protect yourself. Even the most substantial and well-designed investment plan provides little protection if inadequate insurance fails to cover you, your family and your assets from a large financial liability. Review your insurance coverage to make sure you have sufficient protection. Insurance is your first line of defense against catastrophic financial loss to your income and assets.

Since we can’t predict the future, we cannot know what the perfect plan will be.

The good news is that we don’t need a perfect plan, just a sensible one that we can adjust as our circumstances change.

I believe that following these common-sense principles will help you reach your goals, while allowing you to enjoy the journey.

This article is for general information purposes only and is not intended to provide specific advice on individual financial, tax, or legal matters.

Please consult the appropriate professional concerning your specific situation before making any decisions.

John Spoto is the founder of Sentry Financial Planning in Andover and Danvers. For more information, call 978-475-2533 or visit