Five tips to help improve your financial health

Just as people recognize the importance of looking and feeling good, they should also realize it is equally important not to overlook the health of your finances. If your portfolio's returns are looking a bit sickly and you feel you aren't on track to reach your financial goals, there are a few easy things you can do to develop a prescription to address what is ailing your portfolio.Just as vitamins are the building blocks of a healthy diet, your savings are the foundation for your portfolio. Whether you have deductions taken directly from your paycheck, or simply set a little money aside each month, you should save on a regular basis. Once you have the concept of saving down pat, you are ready to consider ways to get your portfolio into shape.First, you should consider what your goals are, and why you are saving in the first place. Perhaps you are putting aside money for retirement, or your child's education, or maybe take the trip of a lifetime. Determining the reasons that motivate you to invest will help you figure out what investments you may want to consider, because you will know when and why you will need your money.Second, before you take the leap into buying stocks or bonds, look at where you currently stand financially. If you have considerable credit card bills or high interest loans, you may want to consider paying those off before you begin. It is important to invest early so you have more time for your investments to grow, but if you are paying out more money to service your debt than you are bringing in through your investments, you are really losing money. For example, if you are paying 18 percent interest annually on your credit card balance while making five percent off an investment, you would be better off financially if you paid down your credit card bill.Once you know what your goals are and where you stand financially, take a look at what your holdings are, and then make sure they are diversified. You should have an adequate mix of stocks, bonds and even cash, depending on how much risk you are comfortable with. Within each type of those investments you should diversify even further - for example, your stock holdings should be in a variety of sectors, such as energy, technology, healthcare or financials. The fixed income portion of your portfolio can also be allocated across a range of maturities and interest rates and even types of bonds, such as corporate or municipal.Next, when you purchase stocks you should consider looking for value. Look for companies with strong fundamentals, such as a strong balance sheet and cash flow statement. Also, you may want to think about purchasing shares of companies that consistently deliver a dividend.Finally, get help if you need it. Sometimes one of the best investments you can make, especially if you aren't a seasoned investor, is to talk with a financial consultant about your goals. They can typically help show you what investment options are available to make sure you are on the right path toward achieving your dreams.Just as you might set a goal for your ideal weight and work to achieve it over time, you should also set goals for your finances. Regardless of how your investments are performing now, there is always time to whip your portfolio into shape.