Smart Financial Tips for the New Year

It’s a New Year, reviewing your financial status is important! Below are a few tips.

1. Review Your Assets and Liabilities. This is the right time to review and update your asset and liability statement.  If you don’t already have an asset and liability statement, create one.  If you are in a marriage or relationship and you are sharing finances, then do this with your spouse/partner.
2. Check Your Credit Cards. Review credit cards to see if you have forgotten about any unnecessary monthly payments which are automatically withdrawn or paid. Address it and save yourself some money.  Make sure your credit card reflects your charges and not someone else’s.
3. Manage Your Debt. Develop a plan to pay off debt, especially high interest debt.  Be methodical. You can’t turn your finances around in a day.  However, you can make significant progress over time if disciplined.  Prioritize and then make sure you stick to the plan.
4. Update Insurance Policies. Review and make sure that your insurance for life, auto and home are properly calibrated.  As we get older the cost for life insurance becomes more expensive, so it needs to be managed and reviewed regularly.
5. Pay Attention to Your Taxes. Make sure your taxes have been filed for all previous years, starting with 2018.  If you have been filing joint tax returns, ask your spouse (or your accountant) about the status of your taxes if you do not know.  You can also check the status of your tax filings on the IRS website.  This has been a recurring theme in cases that come to me — unpaid taxes with devastating penalties and interest accruing.  Don’t be caught holding the bag.
6. Get Smart. Finally, if you are in a relationship with someone who is secretive about money then it is up to you to ask questions. You do not want to be in a situation that if something goes sideways, as it so often does (e.g. divorce, death or disability), you are caught by surprise. It is up to you to know where you stand financially and to make smart decisions.  I can’t tell you how many times a spouse/partner has been shocked to hear that he/she does not have financial security as they thought they did.  As difficult as the conversation may be, it is almost always better to communicate with your spouse/partner about your financial concerns. If you are concerned that your spouse/partner is not responsible with money, have a conversation – perhaps with a neutral financial planner – and figure out a way you can both have some separate money to do as you wish.

Taking stock of your financial well-being is almost as important as taking stock of your physical and emotional health: Don’t ignore it!

Make 2020 a great year for you!