Jump-Start Your Financial Plan For 2019!
By Brett Gottlieb
A new year is often a time for fresh starts, intentional planning, and renewed motivation to conquer goals and accomplish things that are important to you. And while setting New Year’s resolutions is a healthy way to set your intentions for the year, 80% of resolutions fail by February. (1) Thankfully, it doesn’t have to be this way. If you have dreams of making 2019 your best financial year yet, these seven small but impactful steps will help you jumpstart your financial plan and set a firm foundation for your financial life.
1. Start Where You Are
When you look back on the past, are you filled with regret at how you spent your money or neglected to save? Did you make some bad investments or take advice from the wrong source? Don’t let your past mistakes keep you from moving forward. Instead of dwelling on what you wish you could have done differently, learn from your mistakes, reflecting on what worked and what didn’t. Then take your newfound insight and wisdom and move forward. Take stock of your current financial situation, including income, savings, debt, and expenses, and decide what you want them to look like in both the short term and long term.
2. Set Intentional Goals
Don’t be afraid to dream big financially. Do you want to save $100,000 in the next five years or fully fund your child’s college education? Having a lofty goal in mind that reflects your values can inspire you to stay on track, but you can’t stop there. Since it will take time to reach your goals, and plenty of obstacles will come up along the way, set attainable objectives and celebrate your progress.
Come up with deadlines to reach specific milestones on the way toward your overall goal. If you are trying to eliminate debt, for example, determine how much you will pay each month and what your subsequent debt amount will look like in six months, one year, or five years. It’s also important to use visual reminders to keep you on track and help you avoid discouragement. Whether you use a spreadsheet or a chart hung on your fridge door, measure your progress as time goes on and remember that small steps add up to significant progress over time.
Be sure to reevaluate your goals frequently and make adjustments as needed. Having goals and an action plan to achieve your goals will give you perspective in your day-to-day decisions and help you prioritize your saving and spending.
3. Leverage Technology To Make Your Life Easier
Our lives are becoming increasingly busy, and it’s often the seemingly less important financial tasks that fall to the wayside. Thankfully, financial technology has come a long way. Take advantage of the tools available to streamline your financial life so you can devote your time and attention to the things that matter most.
Automating your bills and savings not only organizes your life but also has long-term benefits for your financial picture. Paying your bills automatically tends to improve your credit score, makes budgeting simpler, and can also make income tax preparation easier. Additionally, by automating your savings, you give yourself a chance to save before you can even touch the money.
If budgeting is your pain point, look for a budgeting platform that works for you, and don’t forget to talk to your financial professional to find out if they offer software that allows you to see all your accounts in one place so you can stay organized and track your progress toward your goals.
4. Eliminate Debt
If you are ready to start conquering your goals, one of the first steps you need to take is to eliminate debt. When you pay 10-30% interest on any number of credit cards or loans, you limit the amount of money you have available to put toward your goals. Become relentless about reducing your debt and interest costs, and consolidate accounts where you can.
If you have a loan with a significantly higher interest rate than the others, you may want to work on paying off that one first. Or, if you’re feeling overwhelmed by debt, try paying off the loan with the smallest balance first, no matter the interest rate, in order to gain some momentum. Use a debt calculator to calculate out how long it will take to pay off your debt, then build extra payments into your monthly budget so you aren’t tempted to spend that money elsewhere.
Creating an emergency fund can help you avoid accumulating more debt. By setting up a liquid, easily accessible savings account, you won’t have to rely on debt to cover those inevitable life expenses, such as home repairs or medical bills. Create this cash cushion by putting aside money from each paycheck until you have enough to cover approximately three to six months’ worth of living expenses. You will never regret having an emergency fund at the ready.
5. Make Purposeful Investments
Anyone can close their eyes and pick a random mix of mutual funds to invest in, but having a customized retirement plan based on your circumstances, goals, and risk level is what will get you from point A to point B. Asset allocation is the most critical investment decision you can make, especially in our current volatile market.
Work with a financial professional to determine your risk tolerance level and create an investment strategy that will give your portfolio a clear sense of purpose. It’s also critical to rebalance on occasion to ensure your portfolio is still aligned with your goals and time horizon.
6. Consider Unexpected Risks To Your Financial Plan
No matter how hard you work to create a foolproof financial plan, there will always be risks and roadblocks that have the potential to get you off course. Inflation will decrease your purchasing power and rising healthcare costs can eat away at your nest egg. Unexpected early retirement could change the time frame of your goals, tax changes could throw a wrench into your planning, and the loss of a spouse could impact your standard of living. Speak with your advisor to find ways to protect yourself against these risks.
7. Partner With A Financial Professional
Whatever your situation, whatever your goals, a financial professional can walk you through each of these steps to get your financial plan in shape. You’re much more likely to make your New Year’s resolution a reality if you have a concrete plan in place. At Comprehensive Advisors, we believe that a strong planning process is the best way to create a more financially secure plan. If you want our help to create a customized, detailed blueprint of what you need to do in order to meet your goals, email us at info@ComprehensiveAdvisor.com or call (760) 813-2125 to set up a complimentary consultation.
About Brett and John
Brett Gottlieb is the founder of Comprehensive Advisor and a financial advisor with nearly two decades of industry experience. He graduated from California State University-Chico with two bachelor’s degrees in Business Administration and Economics. Brett is Life Insurance licensed in several states.
John Mc Kean, financial advisor, joined Comprehensive Advisor in 2016. He has been in the financial services and retirement planning industry for over six years. John is Life Insurance licensed in California.
Brett and John previously worked as Registered Representatives with Securities America, one of the largest independent broker/dealers in the country, and currently offer advisory services through Legacy Road, LLC, a Registered Investment Advisor. Both are passionate about educating clients on retirement planning. They take a common-sense approach to the planning process and work with clients to create a retirement road map to help ensure their assets are protected and they receive the income needed to enjoy their future. Based in Carlsbad, California, they work with clients throughout San Diego County. Learn more by connecting with Brett on LinkedIn or email them at info@ComprehensiveAdvisor.com.
Advisory services offered through Legacy Road, LLC, a Registered Investment Advisor.
Brett Gottlieb, Investment Advisor Representative. California Insurance License #0C68886. John Mc Kean, Investment Advisor Representative. California Insurance License #0K37445. Comprehensive Advisor and Legacy Road, LLC are not affiliated.