We would like first of all to wish all our clients, friends, and followers a very happy and prosperous 2019!
And while we are at it, here is a list of possible financial resolutions you might make for 2019. Most of them are a heck of a lot easier than losing 20 pounds or starting that exercise regimen!
8 Financial Planning Resolutions for 2019
- Start a Household Budget. Budgeting is about being intentional with your money. Know what you want your money to do, understand your priorities, and then make spending decisions accordingly, with the help of your monthly budget plan. You will likely spend less money, but you will actually feel wealthier. Financial stress will be reduced as you will be better prepared for those big occasional expenses such as home improvements and vacations. Gaining control over your spending is the firm foundation on which successful financial planning rests.
- Get Rid of Debt (for good!). If you have any debt other than a mortgage, commit to paying it off in the New Year. Debt is the biggest impediment most people face in their pursuit of financial independence.
- Create (or Update) Your Financial Plan. Did a financial plan years ago (but haven’t really looked at it since?) Or maybe you just haven’t gotten around to it yet. Well, a fee only financial planner can help make sure you are on track to achieving your goals.
- Review Your Life Insurance Coverage. If there is a spouse or children who would be financially strained in the event of your death, then you need life insurance. How much is enough? A simple rule of thumb says 10 times your salary in death benefit, but single income parents of young children may want more, while dual income earners may get by with a little less. Ready to retire? You may be able to do without. A fee only financial planner can help you decide.
- Get Your Affairs in Order. Your will designates who you want to receive your assets should you die and who you wish to care for your minor children. A durable power of attorney names someone else to handle your affairs should you be incapable of doing so (for any reason). A heath care directive explains your wishes for medical treatment, should you be unable to express those wishes yourself. In New Jersey, these three documents are usually sufficient to complete your estate plan. People who own property in multiple states, have children from prior marriages, or live in states with difficult probate processes, may benefit from more detailed estate planning.
- Plan for Long Term Care Needs. Don’t put this one on your kids. Especially for those who are 55 and older, start planning for your future care today. Do you have sufficient assets to pay for the care you may need in the future? Should you buy insurance? If so, what kind should you buy? A fee only financial planner can help you sort through these decisions, without pressuring you to buy insurance you may not need.
- Review Your Investment Allocations. Is there too much risk baked into your portfolio? Are you 60 years old, with the portfolio of a 40 year old? Did recent market gyrations leave you a little nauseous? Or do you have idle cash that isn’t invested at all? Commit to taking a good hard look at your asset allocation in the New Year. A fee only financial planner is a good place to start.
- Keep the Insurance Companies Honest. If you haven’t priced out your homeowners and auto insurance coverages lately, now is a good time to do so. Companies tend to reward their most loyal customers with regular price increases – so keep them honest by checking out the competition. Oh, and while you are at it, consider adding an umbrella policy if your net worth exceeds the liability limits of your auto and home policies.