Financial Goals: Time to Take Stock for the New Year

Woman preparing to climb steps

I hate New Year's resolutions. I always have. Perhaps watching so many people make grandiose prognostications has left me jaded. How many times have we all heard how they are going to be better, fitter, more disciplined, less stressed, happier, eat fewer carbs and more vegetables, and call their parents more often, etc. only to witness those resolutions evaporate into puffs of smoke by the time March rolls around? I know in the back of my mind that those people who are so adamantly proclaiming that this year will be different will soon be pushing their resolutions aside into the overflowing shoebox labeled, "items for next year."

"I'll do it next year."

How many of us have those pesky "items for later," that we KNOW we have to complete but for which we never seem willing to make the time? Unfortunately, many issues around our finances fall into the overflowing shoebox of "next year" which becomes, over time, like the island of misfit toys. How many of us have thought to ourselves the following items (followed by an excuse as to why we didn't accomplish it this year, such as, "But I had all those unexpected expenses this year," or "But I was really busy with the kids and couldn't think about it")?
  • "I'll do better at saving money next year."
  • "I'll contribute more to my retirement plan next year."
  • "I'll pay more attention to my investments next year."
  • "I'll get life insurance next year."
  • "I'll draw up my will next year."

The financial goals that you can't afford to keep putting off

Even the most minuscule financial actions will cast a long shadow over the years to come. If you take positive steps now, that shadow can be the delightful shade projected from a sunny beach umbrella, complete with warm sea breezes and the sound of lapping waves. On the other hand, if you make poor financial decisions now or simply fail to do anything with regard to planning and setting financial goals, the shadow cast over your future will more likely resemble that of a diseased tree, prone to topple when the next strong storm comes along.

In case the thought of getting your planning in order is daunting, I am going to break down what I see as the major issues that everyone should address, regardless of age or situation. I challenge you to choose two or three items on this list and make them priorities for the year ahead. Let's not call them resolutions since we know those will blow away with the wind, but requirements. Circle the ones that you need to do this year and stick the list up on your refrigerator where it can glare at you until you cross the items off.

Financial goals to-do list

  1. Keep track of your budget and expenditures using a tool such as Quicken or You can download all of your accounts into one place and track where your money is going. Look for places where you can reduce expenditures. Are there any big expenses that you need to plan for? Check out this review of the best personal finance solutions to find the right tool for you.
  2. Start a savings plan. Using automatic drafts or transfers is a good option to set aside a certain amount every paycheck. You can use a regular savings account or a brokerage account where you can invest the money. Talk to your financial advisor about which investment options would be suitable for you.
  3. Review your retirement savings accounts. Things to consider: How much are you contributing annually? Can you afford to contribute more? Should you consolidate accounts if there are several? What are they invested in (many people just choose a fund for their 401(k) and never revisit it)? Should you do a Roth or a traditional IRA? Or a SEP-IRA? Also, review your beneficiaries for these accounts to make sure they are current.
  4. Run a full retirement income projection based on various inputs to see whether you are currently on track toward achieving your goals and what small changes to your strategy now can do to your projections. The earlier you learn whether you are headed in the right direction, the more time you have to make substantive changes. Your financial advisor can help you do this.
  5. Consider the cost of medical expenses both now and in the future. Will you or a loved one need long-term care insurance to protect your assets against the likelihood of an extended stay in a nursing home? Could you take advantage of a flexible spending account through your employer? Do you qualify for a HSA (Health Savings Account) with your employer?
  6. Shop around to make sure your major expenses are competitively priced. Some things you will want to review are your mortgage interest rate, car loans, home owner's insurance, car insurance, life insurance, credit card interest rates, etc. Rates change so it is important to make sure you are getting the best value.
  7. Create or review your will and/or estate plan. Has anything changed in the last year that needs to be updated? Are you current with the most recent estate laws?
  8. Contact your CPA to see if he/she has any recommendations for minimizing your tax burden. Rules are constantly changing and you will want to keep him/her informed of your situation.
  9. Learn more about investing. If there is a topic about which you would like to become more versed, please let me know in the comments below. I am happy to point you in the right direction.

Planning for a prosperous future

Be ambitious in the new year. Knowing that your actions now will affect the years to come, keep the image of the long shadow you are casting in the back of your mind. Beach umbrella or diseased tree? It sounds comical when written out that way, but the drama implied in the difference between these two analogies is very real. Seriously, who wants to be in her golden years, struggling to make ends meet? Although the items listed above are things we often don't want to deal with, an immense feeling of triumph and relief will come when you have checked one off the list. Now that's a way to start the New Year off right!