5 Ways to Get Your Financial House in Order in 2017

5 Ways to Get Your Financial House in Order in 2017 Header ImageWith the New Year, you might be thinking about what you can do to help get your financial house in order. Read on for 5 critical pieces that can help you build a holistic financial plan.

Update your estate plan

Our lives change constantly, and it’s important for our estate plans to keep up. Whether it’s a new child, a new retirement account, or a change in priorities, take a look at your estate plan to make sure it’s up to date.

The possible changes can range from the significant to the simple, but taking the time to make them can save your family headaches and heartaches later on.

If you’re unsure where to start, first consider whether you’ve had any major life changes:

  • Marriage or divorce
  • Birth of a new child
  • Move to a new home or city
  • Changes in family relationships or business structures
  • New job or transition into retirement

Life changes can trigger changes in your beneficiary designations or bequeaths, so they can be particularly important.

Make sure your estate plan includes:

  • The custodian, titles, and account numbers for bank, investment, and retirement accounts
  • The location and titles of property deeds
  • Your wishes with respect to your children, should anything happen to you
  • Your instructions for the disposition of your property
  • Contact information for your financial advisor, attorney, and accountant

This is by no means a complete list of what should be included in an estate plan, but this information can be very helpful to family members and loved ones in a time of need. If you’re looking for specific advice about what to include in your own estate plan, please speak to a qualified estate attorney for help.

Check in on your budget

With a full year of spending to look back on, the New Year can be a useful time to reflect on your budget. Whether you track your spending manually or use an online tool, go back and take a look at how much you spent and where it went in 2016.

From there, you can ask yourself these questions:

  • What are my major spending categories? Any surprises?
  • Is my spending in line with my financial priorities and my values?
  • Where do I want to spend more? Where could I stand to spend less?
  • What’s a reasonable way to allocate my income given how I’m currently spending my money?

Budgets are often theoretical exercises, which is why starting with actual data can be so useful. We all have blind spots, and money can be a big one: that’s why seeing the numbers in front of you and taking the time to reflect on what they mean can be so powerful.

Use this process to build a budget that’s both realistic and in line with your big picture goals for yourself and your family. It’s well worth the effort, both financially and personally.

Check in on your retirement goals

While looking at your budget, it’s also useful to review your progress towards your retirement savings goals. At your current savings rate, how much will you have at retirement? What are the chances that it’s enough?

Consider the following:

  • How long will your estimated account balance last, assuming you spend at your current income level?
  • Is that long enough?
  • If you saved 5% more or 10% more, how would it impact your savings?

Play with the numbers and see if you can’t make some improvements. Just remember two things:

First, don’t let the perfect be the enemy of the good. Most of us could stand to save more for retirement, but that doesn’t mean you have to get to your “optimal” savings rate right away. Any additional savings you can direct towards your retirement accounts is extremely helpful and good for you.

Second, you might be surprised by the idea of using your current income to estimate your retirement costs. After all, most articles you’ve read probably suggested using 70% or 80% of your income instead.

The thing is, no one really knows what their costs are going to be in retirement.

They may very well be lower, but they might not: right now, you know for a fact that you can live off of your current income. That’s a great starting point – especially if you’re trying to make estimates for something that’s still a few decades away!

These questions can obviously be difficult questions to answer, which is why speaking to an advisor can help.

Increase your retirement contributions

Many people get a raise at the beginning of the year, which can be an extremely convenient time to increase your retirement savings contribution. After all, if you’ve never enjoyed that extra income, it won’t be missed!

But even if you don’t get a raise, consider boosting your contributions, even if it’s only by a little bit.

This can be difficult, especially if you aren’t used to saving, but the long-term impact can be truly significant.

5 Ways to Get Your Financial House in Order in 2017 Info Image

It’s not just about dollars, it’s about developing the habit of paying yourself first. If you start to think about yourself as someone who prioritizes their financial future and security, it can start to impact everything you do.

You might begin to question certain purchases and priorities (especially if you’ve just reviewed a year’s worth of spending!), and you might start to shift your choices in a direction that’s more in line with your long term goals.

So, use the New Year to boost your savings. Whether it’s a little or a lot, you’ll have the reminder with every paycheck that you’re the kind of person who saves for retirement.

Open a college savings account

Similarly, the New Year is a good time to stop and think about your children’s future. College costs have been on the rise for a long time, and it doesn’t look like there’s any end in sight.

A tax-advantaged college savings account can help. A 529 plan, for example, offers tax-free growth and distributions for qualified college expenses.

But again, it’s not just about dollars, though the benefits of these accounts can be significant. It’s about the habit of saving for something that’s important to you – a lesson most of us probably want to impart on our children.

Getting your child involved in their account and encouraging them to set aside part of any windfalls is a great part of the process, and one that can help develop a lifetime habit of sound money management.

For help choosing the right college savings plan, please speak to a qualified advisor, and visit our investor education center to learn more about college savings strategies.

Remember, any step you take towards more comprehensive or prudent financial management is a good one. Use the New Year to take one of those steps, and you could reap the benefits for years to come.

Let Us Help!

We can discuss this topic and more at a complimentary appointment. As a bay area retirement planning coaches, we can give you a review and make suggestions based on your retirement objectives.

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Important disclosures

The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by United Planners.

To determine which investments may be appropriate for you, consult with your financial professional. Please remember that investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk.

Neither diversification nor asset allocation can ensure a profit or prevention of loss in times of declining values. United Planners does not render tax or legal advice.

Registered Representative is not an attorney. The Registered Representative will help review the documents and recommend a local attorney that specializes in Estate planning.
Estate planning can involve a complex web of tax rules and regulations. You should consider the counsel of an experienced estate planning professional before implementing any strategy.
An investor should consider the investment objectives, risks, charges and expenses associated with 529 plans before investing. Most states offer their own 529 programs which may provide advantages and benefits exclusively for their residents and taxpayers. The tax implications of a 529 plan should be discussed with a qualified tax advisor.