New Years Resolution: A Better Financial Future
Dec 29, 2015
Time to say goodbye to the holiday hullabaloo and hello to your future. Beginning the year with a fiscal review is a great way to help ensure a bright financial future.
Your Spending Plan
If you already have a spending plan, or budget in place, you are one step ahead. If you don’t, it’s time to think about creating one. A budget lets you track your expenses and set spending priorities. Reviewing your checkbook or bank statements can show you where your money went during the year and help you find places to save.
Your Net Worth
You can get a picture of your finances at any given time by figuring out your net worth. Net worth is basically your assets minus your debts, and it’s constantly changing. Determining your net worth at the same time every year — or whenever there’s a major change in your finances — can show you whether you’re making progress toward your goals and motivate you to take action if you’re not.
Your Investment Strategy
Choosing investments which can help you work toward your goals is an important part of your financial strategy. So is making sure those investments are performing as you expected by comparing their performance to an appropriate benchmark index. You’ll also want to revisit your feelings about risk.
If your asset mix or risk tolerance has changed, you’ll be able to adjust your portfolio to return to your comfort zone.
Paying off credit card and other high-interest debt should be a priority. As you eliminate debt, adding the money you’re currently paying in principal and interest to your retirement or investment account could make a big difference in the size of your future savings.
Your Safety Net
Protecting your family financially should be a priority. Having enough funds to help replace your income, fund a child’s college education and meet other expenses can ensure that your loved ones will be financially secure in your absence. Talk to your financial professional about the ways life insurance can also help figure into your estate strategies.
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