Financial Resolutions

January 5, 2021

January is Financial Wellness Month which is the perfect time to get organized and make sure you have your “financial resolutions” planned out. If you do not know where to start, contact us and we will help you with your Financial Plan, but here are a few tips:

Write down your financial goals. When you have goals written out you are more likely to achieve them. Of course, every individual will have different goals depending on which stage they are in their lives. For example, if you are in pre-retirement you will want to decide what age you want to retire and how much do you need to live comfortably during retirement. Most people fear outliving their money so having a plan is crucial.

Update your net worth statement. Your net worth is a calculation of your assets minus your liabilities. Assets include your investment accounts, retirement accounts, bank accounts, annuities, real estate, etc. Liabilities include mortgages, student loans, car loans, or other debts. Your net worth will fluctuate over time but understanding where you are now and where you want to be is the goal. The goal is to pay down your liabilities and increase your assets.

Establish an emergency fund. The rule of thumb is to save three to six months of living expenses. This will cover you in the case of an emergency without forcing you to accumulate more debt.

Start saving or continue saving for retirement. If you have a full-time job you should contribute at least up to the amount the company will match into your 401k. If your company does not offer a 401k, then you should consider contributing to a ROTH IRA or Traditional IRA.