Financial Resolutions for the New Year

January 05, 2017 | By Jon Powell, CFP®| Financial Planning

Happy New Year! I hope our clients and readers had a wonderful holiday and are excited to enter 2017. A New Year brings new opportunities to get a hold of your financial life.

Many people want to improve their financial well-being, but are unsure of effective ways to go about doing that. In this week’s post I’ve compiled some suggestions for how to make positive moves on your finances in the New Year. Treat these as your new financial resolutions.

Increase Your Retirement Account Contributions

If you aren’t already maxing out your retirement contributions, consider bumping up the amount you’re deferring from each paycheck. Small increases in your savings rate can have a dramatic effect on your balance at retirement.

Most people have access to pre-tax retirement plans through work. This means that when you contribute additional money to your 401(k), you aren’t actually reducing your take-home pay by that full amount.

In many cases, an individual’s taxes may end up taking a 25-50% bite out of the amount you earn. Because of the pre-tax treatment of 401(k) deferrals, an additional $200 contributed to your plan each paycheck may only result in you receiving $100 less in take home pay – ultimately netting you more money.

Be Serious About Your Finances and Get a Plan

Organizing your finances and understanding what it takes to accomplish your goals is important. A quick browse through our website illustrates our belief in the need for people to have a financial plan.

Money (and worry over not having enough of it) is often one of the primary causes of anxiety and strife. This worry can often endanger relationships with your family (constantly fighting over money) and causes tremendous stress.

Most of this stress is due to uncertainty about your financial future. “Can we afford this? Will we have enough to retire? When can we retire?” Not knowing the answers to these questions is the true source of your financial angst. A financial plan will clear this up.

Financial planning identifies what you have and how far it will go along with optimizing what you can do going forward. It removes the uncertainty in your financial life.

The peace-of-mind gained from having this road map can be invaluable. Work with us or another fee-only, fiduciary advisor from NAPFA and take control of your finances.

Unsubscribe to Marketing

We all like to fancy the idea that “advertising doesn’t work on me”. Well, unfortunately you’re probably wrong about that belief. Just because you don’t run out to Chili’s after seeing a rack of their ribs in commercial doesn’t mean advertising isn’t having an effect on you.

One of the most sneakily effective ways marketers get to your wallet is through email. If you’ve done any online shopping, chances are you receive periodic (usually daily) offers from outlets that you’ve shopped with before.

Most of the time, it’s easy enough to delete them and move on with your day. However, sometimes there’s just a deal that’s too god to resist.

This is called reactive shopping – it is far less satisfying than proactive shopping. Do yourself a favor and go through your inbox and click unsubscribe at the bottom of each company’s emails. I think you will be surprised after a few months that you are purchasing less of things you don’t need.

If you want to take this a step further, do this with snail mail as well. The magazines and circulars you receive in the mail have numbers on the back where you can request to be removed from their mailing list.

This will be a bit more time-intensive than unsubscribing to emails, but I’m sure you’ll appreciate having less junk mail to carry inside from the mailbox each day.

Are You Ready to Speak with a Financial Advisor?

Once you determine that it might be time to work with a financial advisor, it’s important to find the right advisor for you and your family. We’ve put together a guide of questions that are essential to ask an advisor before you hire them.

20 Questions to Ask a Financial Advisor

Don’t make a mistake by working with the wrong financial advisor. Ask the right questions the first time to determine if a financial advisor is right for you.

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If you’re looking for a wealth manager and financial advisor that puts you first, call Ferguson-Johnson Wealth Management today!