With a new year approaching, now is a great time to review your 2017 financial life. Let’s start with the basics - your personal financial statements (check out the financial term of the day!). Take some time to create your personal balance sheet to see what you own, what you owe, and your net worth. When you’re creating your balance, you’ll have an opportunity to review your banking, retirement, and investing accounts, the cash value in your life insurance, other assets/personal property, your mortgage and auto loans, and other debt. This exercise gives you a clear view to see where you stand - financially. Next, work on your personal cash flow statement. Here you’ll be able to see the sources of your cash inflows and outflows. This will help you identify what areas you need to budget for or cut back. Make creating and reviewing your personal financial statements an annual practice so you can gauge your progress towards your financial goals. Now that you’ve reviewed the basics, here are some other items to review:
- Review your spending (personal cash flow statement), set up automated savings (pay yourself first!), and fund your emergency account.
- Did you get a year-end bonus? Why not contribute some or all of that bonus into your 401k?
- Pay down or off your credit card(s) or student loan(s).
- Review your contributions to your 401k and consider increasing your contribution by at least 1 percent for 2018.
- Did you get a new job? Take control of your old 401k by rolling it over into a self-directed IRA.
- Have a balance in your FSA account? Spend that money - remember it’s use it or lose it!
- Review your insurance policies – is your coverage adequate (life and disability)?
- Did you get a big tax refund or owe a large amount? Review tax withholdings for 2018.
- Did you add a bundle of joy to your family? Review your beneficiary designations on your retirement/investment accounts and your life insurance.
Don’t forget that we can help you with your year-end review with a financial planning session. Start 2018 on the right financial foot! If you’re interested in taking advantage of the planning sessions, please contact Anne Simpson firstname.lastname@example.org
Editor's Note: This blog post is part of the December 2017 edition of Odyssey NexGen Newsletter. Curious about Odyssey's NexGen program? Email Anne.Simpson@odysseypfa.com to learn more.
Reviewed & approved via C2C by AP 12/19/17