4 Financial Resolutions to Kick-Off 2018
You’ll Thank Yourself a Year from Now: Financial Resolutions
With New Year’s right around the corner, it is the perfect time to make resolutions before the calendar flips to January 1. The 7th Annual New Year’s Resolution Survey found that many resolutions made last year were focused on faith, family, and personal wellness. Unfortunately, financial stability trailed far behind, with only 29% reporting financial considerations in their New Year’s resolutions. We are hoping to change that this year by providing the top four financial resolutions to make for 2018:
Financial Resolution #1 – Diversify Your Income Streams
Does the bulk of your annual income come from one source? Is there one slice of the pie that dominates your other income sources? It is almost always a good idea to diversify your income streams as much as possible so you are not overly dependent on one particular stream for greater than half of your income.
Create a tangible game a plan to grow other income streams so that you increase your overall income and decrease your reliance on any one particular source. This resolution is all about establishing financial security so you are prepared, and not surprised, if something happens to your primary income stream.
Financial Resolution #2 – Get Organized and Stay Organized
Organizing your finances may be a task that easily gets put on the back-burner, especially when juggling multiple priorities. There are plenty of online tools that make it easier than ever to get organized and stay organized. Here are a few of our favorites:
Mint: Mint shows you your balances, lets you pay your bills, track your investments, and more—all in one place.
Shoebox: Shoebox helps you digitize and organize all of your receipts; plus it archives everything and is completely searchable.
Buxfer: If you share costs with family members or significant other, Buxfer allows you to neatly split expenses, create budgets and bill reminders.
Another helpful tip for staying organized is to divide your financial documents between short-term and long-term. Short-term documents could include files from the past year, such as bills, statements, tax receipts, health records, etc. Long-term files could include income tax records, inheritance papers, legal documents, reports from trusts, birth certificates, Social Security cards, physical stocks and bonds, mutual funds statements, etc. Use the filing system that you think works best for you and stick to it!
Financial Resolution #3 – Stop Neglecting Your Insurance Policies
Although most people do not do this, it is a very good practice to review your insurance policies annually. What better time to make this happen than with the change of the New Year? Review your auto insurance, homeowners’ insurance, life insurance, business, and even umbrella policies. The umbrella policy is particularly important to focus on because, as your net worth increases, your exposure to a lawsuit increases as well. Check for lapses in any of your coverage and make sure you are not overpaying for a coverage that might be more affordable somewhere else.
Beyond insurance policies, take a look at your wills or estate plans. Your beneficiaries or assets may have changed, so update these plans to ensure your will or estate plan remains accurate and reflective of your true intent.
Financial Resolution #4 – Perform a Thorough Retirement Check-Up
Finally, meet with your financial advisor to review your retirement plan (assuming you already have one). With a complete understanding of where you stand with your retirement savings, it is possible you will find places to improve and/or gaps to close. Review how much you have saved, how much you are adding each year, and whether you will end up with enough in your “retirement nest egg” if you continue your present course. US News recommends tweaking your retirement savings by boosting it in the New Year if possible.
Your financial stability impacts both your physical well-being and the well-being of your family. As you set your resolutions for the New Year, keep in mind these four important financial resolutions and check-points.
Curious if you would benefit from a comprehensive and personalized year-end financial audit? We are here for you, and welcome sitting down with you to discuss your circumstances further. To schedule a complimentary and confidential initial discovery meeting, call (916-405-9140) or email (email@example.com) us today.