10 Tips to Get Your Financies Off To A Strong StartSubmitted by Blue Rock Wealth Management on January 12th, 2016
10 Tips to Get Your Finances Off to a Strong Start
Every year financial goals top the list of common New Years Resolutions. Whether it’s a new goal for you or you're looking for ways to continually improve your financial situation, here are 10 easy to implement tips to get your year off to a good start.
1. Write down your goals. Goals should be measurable and specific. An example would be to establish an emergency fund equal to three months of my expenses which is $xx or start contributing to the company retirement plan at 5%. There is tremendous power in writing down your goals. Do this not just once but take a few minutes ideally daily to journal your goals. It may be the most powerful 60 seconds of your day.
2. Find an accountability partner. Use peer pressure for good and not evil. If you tell someone about a goal, you are much more likely to stick with it simply because of the public proclamation. To kick it up a notch, create some consequences such as if I don't do x, I'll have to wash this person's car.
3. Get organized. There is a great little book called The Magic of Tidying Up by Marie Kondo that asserts when we remove extraneous clutter from our lives really positive things happen. If you have unnecessary old statements, reports, etc... cluttering up your life, it can make your financial situation feel out of control. Simply organizing your financial affairs and keeping important documents safe while letting go of others can do wonders.
4. Shred sensitive materials to protect your identity. When you are decluttering, remember not to just throw papers out that contain sensitive information such as your date of birth, social security number or account information. Would be identity thieves may be going through the trash. Invest in a shredder if need be.
5. Look closely at automated payments. As you are going through those old statements, look at automatic charges to your checking or credit card. Are you still paying for services you don't use or don't need? If so, get rid of them.
6. Automation can be used in your favor when it comes to saving. Just like those automated payments, you can automate savings by setting up a monthly draft to an investment or by enrolling in an employer sponsored plan.
7. Review your insurance coverages. Don't be tempted to eliminate protective insurance coverages without thinking through the consequences. Obviously you can over spend on insurance but insurance is an important safety net for most people's plans. Talk to an advisor before cancelling coverages.
8. Review your investment allocations. Set it and forget it can be great for savings but you need to review your investments especially after a volatile year or at certain milestones such as turning 50 or 60, etc. You can often take a risk tolerance questionnaire or certainly talk to your advisor who knows you personally.
9. Get tax help. Soon you will begin to gather your tax documents. If you have a very simple situation, maybe you can do it yourself but I often find people need more tax guidance. Taxes are a big expense for many people. If you have taxes withheld from your income, you may not notice but still the expense is there. A reputable tax advisor may be able to identify some savings for you.
10. Turn off the 24/7 market news! If you've covered 1-9, there is no reason to be hypnotized by the hype of sometimes sensational news coverage. You'll just end up emotionally charged and emotional decisions are rarely good ones.
You need to accept accountability for your financial life but remember to seek help when needed be it about insurance, investments or taxes. You can likely cover 1-10 above in only a few hours and likely less if you have someone to guide you. Make this investment in yourself and your financial future and get your New Year off to a great start!