By Clay Zachry, CFP®
Personal Wealth Advisor
Despite the year-end volatility in markets during December, we continue to remind our clients that the first weeks of any New Year are an opportune time to review their financial planning strategies and to strengthen their fiscal health in areas they can control during market fluctuations in the coming year – and beyond.¹ Harris Financial Advisors suggests taking the following steps these first few weeks of 2019.
Step One – Examine your current individual and family financial plans and goals
- Budget: Where, how, when are you spending money? Review your routine bills and payments to determine what you will spend this year, and to plan what your budget could and should look like for the next 12 months.
- Save: Commit now to earmarking earnings for savings and investments – toward education, health costs and retirement, as well as other areas – and follow through on those commitments during 2019. Ask your advisors to help you calculate specific financial amounts for your savings goals; having a clear idea of how much you intend to set aside will help you stay committed throughout the year to those goals.
- Manage debt: Aim to pay credit cards and bills in a timely manner, and also review rates on credit cards, auto insurance, cell phones and household utilities to know that you are getting the best deals; when possible, contact companies to ask about lower rates.²
Step Two – Plan for the future
- Assess financial preparedness: Review your current investments and financial planning strategies as you discuss your long-term financial goals. Consider unexpected developments and gauge how well you are prepared to handle any potential fiscal challenges – health issues, a change in job status, a move – during uncertain economic times. Consult with your advisor for assistance in developing financial plans that ensure you can weather times of fiscal turbulence.
- Clarify estate-related finances: An important part of mapping your fiscal future is examining the various ways you are planning “now” for “tomorrow.” Take a closer look at 401(k) and Roth IRA retirement contributions, Health Savings Accounts, charitable giving and financial gifts to family (such as 529 college education accounts). Review potential tax costs and benefits on your income and investments, and go over estate planning items to make sure they are up to date, including your will and life insurance.³
- Update retirement plans: Make sure you are financially ready for retirement, especially if this is a goal in 2019 or soon after. Start by taking steps to evaluate retirement-related expenses such as health, potential travel or home maintenance costs. Also develop a clear sense of your estimated retirement earnings and where those funds will come from (Social Security, retirement accounts, other investments) as you move toward the next phase of your life – it’s one way to help ease the emotion (and occasional stress) of transitioning out of the workplace.4
Among the resolutions you make this year, include one to address your financial health and review your financial planning and investment strategies. If you are a client of ours, we are already working with you on all of this through our regular meetings and conversations. Otherwise, contact us to begin the process.
1. Dunn, Peter. USA Today, “Financial Planning: How to Meet your Money Goals in 2019.” December 7, 2018. https://www.usatoday.com/story/money/columnist/2018/12/07/financial-planning-how-meet-your-money-goals-2019/2134006002/
2. Nance-Nash, Sheryl. Newsday, “Making Financial Improvements in 2019.” November 16, 2018.
3. Murphy, Lora. Onebite: Eating the Financial Elephant, “Your Year-End Financial Checklist.” December 2, 2015. https://onebiteblog.com/your-year-end-financial-checklist/
4. O’Brien, Sarah. CNBC Personal Finance, “If you’re planning to retire in 2019 here’s how to make sure you’re prepared.” November 4, 2018. https://www.cnbc.com/2018/11/02/if-youre-planning-to-retire-in-2019-heres-how-to-make-sure-youre-prepared.html