Briefing with Bruce – February 2026

I recall Mom telling us that when her husband was in medical school, she would shop for groceries with a price counter. When she put an item in the shopping cart, she’d enter the price—click, click, click—as it kept a running total.

Staying within a budget was critical. Go over, and the risk of a bounced check was real. Remember when shoppers wrote checks at the grocery store? Today, you don’t see it that often…or at all.

Jump ahead a few years. He had established a successful private practice, and the counter was no longer there. I recall her mentioning that she freely added anything she desired to the shopping basket.

I didn’t perceive this as bravado. The family’s financial situation had significantly improved, giving them financial breathing room.

Let’s ask a simple question. Which version of the couple was “financially fit”? We don’t have enough information to definitively answer the question.

In some respects, the couple living on a shoestring budget was disciplined. Yet, when day-to-day expenses were no longer an issue, we could assume that the family was much more inclined to plan financially for the future, from college savings to retirement.

What is financial fitness?

Financial fitness grows through consistent habits such as budgeting, reducing and eliminating debt, saving, and planning for the future. In turn, stress is reduced, and you build lasting financial strength.

The fundamentals are the foundation

Financial literacy is a close cousin of financial fitness.

Financial literacy allows you to use your financial skills to make informed decisions about money. It includes knowing how money works, managing it, and planning for both short-term needs and long-term goals.

A helpful analogy is that literacy is knowing what it takes to be healthy, while fitness is actually doing it, like eating well and exercising. Put another way, “I know I need a budget,” so I put this knowledge into practice by developing a spending plan and adhering to it.

6 steps to financial fitness

Some of these steps may seem rudimentary and simple. But understanding the basics allows us to build upon a solid foundation. Some of these steps may be well worth sharing with your children.

1. Develop a spending plan (budget).
   A very good friend tracked his family’s expenses for decades. He could tell you how much he and his wife spent on gasoline in May 2003.He set up categories on a spreadsheet and entered expenditures each month. He also had a savings category. Think of it like paying yourself each month. He and his wife not only developed the plan, but they also had the discipline to stick to it.

   Seems extreme? Well, he retired six years ago at 58.

2. Manage your debt.By itself, debt isn’t necessarily bad. You may have a mortgage that you can manage. You might have a car payment that you can comfortably pay off within a reasonable amount of time. But what if you carry credit card balances at a high-interest rate month after month?

   Financially fit individuals and families pay off their credit card balances every month. They understand that lifestyle choices will immediately impact finances. They avoid superfluous purchases. They save for vacations and family outings.

   If you are struggling with credit card debt, pay off high-rate credit cards first. When you’ve paid the first one off, roll that payment into the next card, and continue until credit balances are at zero. As you make progress toward your goals, reward yourself along the way.

   Be leery of taking out home equity loans to pay off credit card debt. For starters, you’ve just transferred unsecured debt to your home. Besides, experience tells me that some folks will simply run up debt on the credit cards that were just paid off.

3. Saving and investing.Develop a short-term and long-term plan. We suggest at least six months of easily accessible savings. A simple money market account that pays a market rate of interest is not only accessible, but you’ll also earn a modest return and have funds in the event of an emergency.

   Long-term goals may include saving for college and retirement. College savings vehicles have been created to help you reach your goals, including 529 plans, prepaid tuition plans, Coverdell education savings accounts, and Uniform Gifts to Minors (UGMA) accounts.

   They offer tax advantages, and we’d be happy to help you get started if you have questions.

   As with college savings, there are numerous options that are available to help you save toward your retirement goals.

   In order to establish a realistic retirement plan and track your progress, we will include any additional income streams, including pensions and Social Security.

4. Tax planning.Don’t get caught off guard. Understand withholding and estimated tax payments if you are self-employed. Understand what common deductions and tax credits are available to you.

   We’ve written on this before, but we’d be happy to provide a refresher for you—just ask. When dealing with taxes, don’t hesitate to consult your tax advisor.

5. Teach kids about money.Start early and give them a small allowance. Teach them about savings versus spending. Let them set goals and use a portion of their savings to make purchases. Encourage them to set aside a small amount for their favorite charity.

   As they get older, teach them about credit and the importance of avoiding trouble that can arise with credit. More importantly, model proper behavior. Your kids are astute. They are watching what you’re doing.

6. Legacy.Estate planning isn’t just for the wealthy. Don’t leave this one aspect of financial fitness to chance. It’s a loose end you don’t want to leave untied.

   It’s for anyone who wants to protect family assets and their legacy. A will and estate documents provide clarity, prevent conflict, and ensure your assets and decisions are handled the way you intend.

   But we want to caution that this concept extends well beyond the scope of the article. As with tax planning, we would love to answer your questions, but we also encourage you to speak with an estate planning attorney, too.

Financial fitness is about building healthy money habits that will improve financial stability and reduce stress. If you attempt to conquer the mountain all at once, you may be overwhelmed. But small, consistent steps will strengthen confidence and resilience over time and put you on the path toward financial fitness.

If you need help getting started, reach out to my office and we will send you a budget worksheet. It’s a great first step.

January’s solid start

A quick review of the table of returns shows that the new year started favorably. As we saw last year, global markets continue to outperform, but there has been a shift in leadership in U.S. stocks.

Notably, the tech-heavy Nasdaq Composite is lagging, while smaller company stocks, as measured by the more speculative Russell 2000 Index, are out in front.

Source: Wall Street Journal, MSCI.com, Bloomberg, MarketWatch

January 2026 returns: December 31, 2025–January 30, 2026

**in US dollars

Though we only finished the first inning, we are seeing the rally broaden, which is encouraging.

Optimism that the U.S. economy will accelerate has fueled the market rotation, encouraging investors to seek out companies whose fortunes are more closely tied to the business cycle. Fed rate cuts have also bolstered returns for smaller companies.

Yet, a slow start for the Nasdaq doesn’t necessarily mean that the AI boom is over. Profit-taking, greater selectivity, and concerns about market concentration may be at play.

January Barometer

The so-called January Barometer holds that the market’s performance in January, as measured by the S&P 500 Index, foreshadows how stocks will perform during the year.

Since 1970, January finished higher 33 times and fell 23 times, excluding 2026’s advance (St. Louis Federal Reserve data; excludes reinvested dividends).

How accurate is the barometer? As illustrated in Table 2, a positive January, coupled with a positive year, occurred 29 times since 1970. Simply put, when January finished higher, the S&P 500 gained ground 29 times. The average increase: 19%.

There were only four years in which January was positive, but the year finished lower. The average loss was 5.2%.

Data Source: St. Louis Federal Reserve, 1970-2025, dividends not included in S&P 500 returns.

Past performance is no guarantee of future results.

If January posts a decline, all is not lost, but an up year is less likely.

When January finishes higher, the January Barometer has been a ringing endorsement for the full year, though let’s not discount the possibility of market pullbacks, as we saw last year.

Why does a positive start typically result in a favorable year?

If the year begins on a favorable note AND indexes tend to move higher, bullish sentiment has the upper hand. Put another way, the bears are starting out at a disadvantage AND must overcome the market’s tendency to move higher.

However, a strong start to a year can be derailed by policy missteps, recessions, rising interest rates, or other unexpected economic headwinds.

Still, tools like the January Barometer provide interesting signals, not guarantees. Market performance is still driven by economic fundamentals, as history has consistently demonstrated.