Everybody wants to clean up their finances and be financially independent. Very few achieve it. Here’s your financialÂ resolutionÂ calendar.
Organize your paperwork. This is the obvious starting point that many people skip. Make sure your financial documents are organized so information is available for use for the rest of the year’s tasks? You’ll thank me later. And if you unexpectedly die or are incapacitated, your family will really thank me and you.
Simplify investing by consolidating
Follow the money. If youâ€™re not enjoying life, your personal cash flow may be hemorrhaging. Figure out where the money comes from and where it’s going, so you can consciously direct it towards what you love!
Be tax-smart! Make sure you’ve contributed the max to IRAs and Roths IRAs. Max to your 401k or 403b if you haven’t already. And make sure you use your losses on taxable individual, joint, and trust investment accounts.
Investment smarts. How much do your investments cost you? Do you know what your insurance agent, 401(k) plan or financial advisor charges? How about the underlying expenses you pay to buy mutual funds or exchange-traded funds?
Are your investments allocated wisely to minimize taxes? For example, do you hold real estate investment trusts in your tax-deferred account? Municipal bonds in your taxable account? How much risk do you take?
Know your worth. You can calculate your net worth (all your assets, such as your home and retirement funds, minus all your liabilities, such as your mortgage and credit card debt) many ways. By tracking your net worth, you can see if you’re making smart money decisions that increase your worth. .
Take a vacation! Seriously. You work. You save. So maybe you should check off one of those bucket list items by fulfilling one of the goals in your financial plan. Go ahead. You’ve earned it.
Make sure you can retire. Retirement planning starts in your 20s and goes on until you die. If youâ€™re not retired, know when you can afford to retire. If you are retired, know how likely you are to succeed with your retirement goals.
Protect yourself, and your family by insuring against risk. Insurance keeps you financially whole if disaster strikes. Make sure you have enough life insurance to take care of your loved ones if you die. Know if your disability coverage is adequate to meet expenses if you’re disabled. And consider long-term care insurance, especially if youâ€™re a woman with a longer life expectancy than a man? This coverage helps with
Plan your legacy! If you die without a will, your state of residency distributes your assets with no input from you. If your estate documents are older than five years, review them. Everyone needs a
Key reasons to review:
- Youâ€™re in a second marriage
- You own property in or reside in more than one state
- Youâ€™re concerned about privacy
- You own a business or
- Your family must consider special needs.
Tax Planning. It’s time to see if you have Roth Conversion, Zero Capital Gain, or Tax Loss Harvesting opportunities to utilize your tax brackets.
You might ask a professional advisor to check your assumptions. Be realistic about what you can accomplish on your own.
Itâ€™s important to get your finances right and keep them right all year.