The start of a new year isn’t just about setting goals at the gym or finally organizing your garage – it’s the perfect time to hit reset on your finances. Whether you are planning for retirement, paying down debt, or saving for that big purchase, taking a few intentional steps now can set you up for success all year long.
Here’s your ultimate financial checklist to help you start strong and stay on track:
1. Set Clear Financial Goals
What do you want to achieve this year? Maybe it’s paying off a credit card, building your emergency fund, or maxing out your 401(k). Take time to:
- Write down your short, mid, and long-term goals, ensuring they are specific and actionable.
- Adjust targets based on progress or new priorities.
- Set up a savings plan and timeline to avoid last-minute stress.
2. Refresh Your Budget
A good budget isn’t about restriction – it’s about intention. Look back at last year’s spending and identify areas to improve. Make sure your budget reflects:
- Any expected changes in income or expenses.
- Big plans for the year, like a vacation, wedding, or home project.
- Space for savings goals; Use the 50/30/20 rule (50% needs, 30% wants, 20% savings or debt repayment)
3. Rebuild or Review Your Emergency Fund
Life happens, and having 3-6 months’ worth of expenses saved can be a game-changer. If you dipped into your emergency fund last year, make it a priority to rebuild it.
4. Check Your Investments
The markets go up and down – that’s normal – but your portfolio should still align with your goals. Start the year by:
- Reviewing performance.
- Adjusting for your risk tolerance and timeline.
- If you’re maxing out your 401(k) or IRA contributions, check this year’s IRS limits and give yourself a savings boost.
5. Prepare For Taxes
Tax season is just around the corner. Get organized now and reduce stress later by:
- Gathering all receipts, documents, and records.
- Reviewing strategies to reduce taxable income (like maxing out retirement plans).
- Checking in with your CPA or tax advisor for any last-minute planning tips.
6. Tackle Your Debt
High-interest debt can hold back even the best financial plans. Take inventory of all loans, credit cards, and mortgages, and create a strategy to pay down balances.
- Focus on paying off high-interest debt first.
- Consider refinancing options if rates have improved.
- Automate your debt payments to stay consistent.
7. Review Your Insurance Policies
Life changes, and so do your insurance needs. Take this time to:
- Review your health, auto, home, and life insurance policies.
- Update coverage to match your current situation.
8. Update Your Estate Plan and Beneficiaries
While not the most fun task, estate planning ensures your loved ones are cared for. Make sure to:
- Update your will or trust.
- Confirm beneficiary designations on 401(k)s, IRAs, and insurance policies.
- Review power of attorney and healthcare proxy documents.
9. Automate Your Finances
Automating is like putting your finances on autopilot. Set up:
- Automatic bill payments to avoid late fees.
- Recurring transfers to savings accounts.
- Regular contributions to your 401(k) or other investment accounts.
10. Schedule a Financial Check-In
Finally, make it a priority to meet with your financial advisor. A quick strategy session can help you:
- Stay aligned with your long-term goals.
- Plan for tax efficiency.
- Adjust your portfolio based on life changes or market trends.
Start the Year with Confidence
Taking these small steps now can make a big difference in the months ahead. If you have questions or want a partner to help guide your financial journey, we’re here for you.
Let’s make this year your best financial year yet!
Your Team at Benedetti, Gucer & Associates