With New Year’s right around the corner, it’s the perfect time to make resolutions before the calendar flips to January 1st. 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’re 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’s a good idea to diversify your income streams as much as possible so you aren’t dependent on one particular stream for 50% of your income.
Create a game plan to grow other income streams so that you increase your overall income and decrease your reliance on anyone source of income. This resolution is all about establishing financial security so you’re prepared if something happens to your primary income stream.
Financial Resolution #2 – Get Organized and Stay Organized
Organizing your finances may be a task that gets put on the back-burner, especially when you’re 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 papers, reports from trusts, birth certificates, social security cards, 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 don’t do this, it’s 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 liabilities could increase. Check for lapses in any of your coverage and make sure you aren’t 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 through the year.
Financial Resolution #4 – Perform a Thorough Retirement Check-Up
Finally, meet with your financial advisor to review your retirement plan. With a complete understanding of where you stand with your retirement savings, it’s possible you’ll find places to improve. Review how much you have saved, how much you’re adding each year, and whether you’ll end up with enough savings if you continue your present course. US News recommends boosting retirement savings 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.
Want a personalized year-end review? We’re happy to schedule a complimentary and confidential meeting. Call or email us today.