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Important financial steps to take every year


Regardless of your age, there are a few money moves to consider every year if you want to improve your financial situation. Financially successful people don’t put their finances on autopilot and these simple moves can make all the difference.
 
Where do we start, big picture or in the details?
The best place to start is looking at the big picture. Discuss with your financial partner your current financial goals and decide if any of them need to be altered. This discussion helps you make important tactical changes to your daily financial plan. Checking each year that you are moving towards your long term goals at the right pace is important.
 
After getting the big picture, what is the next step?
This is when you really need to get into the details. This is creating or updating your monthly budget and making sure that it aligns with your long term financial plans. Whether you are in retirement or just starting out, your monthly budget has a very huge impact on your ability to reach those long term dreams.
 
Is there a need to review your retirement funds or 401k annually?
It is always important to make sure your portfolio still meets your current risk tolerance and that your current investment mix still reflects your intended diversification of assets. Often times this mix can change based on the prior year’s performance. If you neglect this for several years, you might be taking too little or too much risk and could miss your long term plans because of this situation.
 
What if you carry a lot of debt especially credit card or student loans?
It is always a good idea to review your current interest rate and compare to what you can find in the marketplace. If you can lower your rate, your overall cost of debt will be lower, especially if you keep making the higher payment even when transferring to lower cost debt. This means looking at all of your debt including your mortgage and auto loan.
 
What are reasons to conduct a review of your estate plan?
If you have had a life change such as marriage or adding a child, this should create an urgency to review your estate plan. Updating wills and beneficiary information is the most important and then there is the review of current insurance coverages with the change in family assets.  Even without this type of life event, it is always good to update information about current assets and passwords that people might need.
 


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