Financial New Year’s Resolutions: Self-Help Promises for Financial Well-Being You Can Actually Keep
January 3, 2020
We often promise ourselves to do better after the holidays… and then we gradually (or all too quickly) stop following through on those promises. With that in mind, here’s a set of financial New Year’s resolutions that anyone can follow. And even if you fall short or don’t commit to the entire list, just doing a few of these will still help improve your overall financial health. Many of these tips are things you can do on your own or with your family, but if you want extra guidance, talk to a trusted financial planner. GHPIA asset management clients seeking more in-depth advice on how to put their financial house in order may call us at (303) 831-5051.
Write a budget.
Calculate your net worth – assets minus liabilities. Tracking this figure can help you strategize your long-term saving and spending.
Commit to a savings strategy. This could be anything from saving a few dollars from each paycheck to making large deposits to your investment accounts.
Set aside money for emergencies, big-ticket items you expect to buy in the next year or so, and at least three to six months’ worth of living expenses.
Get on top of your debt.
Pay off your credit cards. There are many ways to consolidate your outstanding balances that can be less costly than your high-interest, non-deductible credit card debt.
Keep all your debt payments — credit cards, mortgages, auto loans – below 36 percent of your pre-tax income.
Manage your portfolio.
Commit to a long-term strategy, where you won’t be distracted or alarmed by short-term market volatility.
Find a balance of asset classes that fits your risk tolerance, time horizon, and goals.
Diversify across and within asset classes to reduce risk and increase opportunities.
Invest with tax consequences in mind.
Check your portfolio at six-month intervals and rebalance, if necessary.
Better yet, talk to an independent registered investment advisor, like GHPIA, to take care of all these steps for you and take the anxiety of managing your portfolio off your hands.
Keep up your insurance.
If you buy health insurance on the individual market, adjust your coverage (during open enrollment period) according to your own fitness, frequency of doctor visits, and ability to pay deductibles, co-pays, and out-of-pocket costs.
Consider your life insurance needs, keeping in mind your goals for your dependents as well as creditors’ claims on your estate
Consider long-term disability insurance to protect your earning power.
Make an inventory of your valuable household items and insured possessions, including their appraised values and replacement costs.
Secure your important documents – birth certificates, wills, passports, insurance policies, and other legal papers — in a disaster-proof, evacuation-ready box.
Insure your home and your cars.
Consider personal and business liability coverage.
Plan your estate.
Prepare or update your will.
Review all the beneficiary designations on your life insurance, annuities, and retirement accounts.
Make sure your assets that don’t have beneficiary designations, like real estate and non-retirement accounts, are legally titled according to your wishes for their disposition.
Set up durable powers of attorney for your health care decisions.
Store your important estate documents safely, and make sure a trusted relative or friend can access them.