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JANUARY: Financial Wellness Month

Retirement Lifestyle Family

With January being designated as “Financial Wellness Month,” we encourage you to start the new year embracing new possibilities and setting financial goals as a first step in working toward a more secure financial future. It’s a great time to work on improving your financial health and to take a hard look at our financial habits.

We have put together our checklist of Top 10 areas to focus on to identify your priorities, along with tips to help you kick-start your Financial Wellness program for 2024.

1.  Track your Spending

Review your expenses to understand where your money is going.  This is always an eye-opening exercise.

  • Breakdown your spending to essential and discretionary spending 
  • Make a plan to pay down high-interest debt like credit cards and student loans
  • Set long-term goals, such as retirement, and save money each month

2. Review your Investments and Risk Tolerance

It’s important to review your investment accounts each year to ensure your portfolio is in line with your financial goals and needs. As you age and you take on more responsibilities, your tolerance for risk will change. 

  • Make sure your portfolio is in line with your target asset allocation
  • Rebalance your portfolio if it has shifted due to last year’s market activity
  • Revisit your level of risk tolerance
  • Make sure your investment portfolio is diversified and not concentrated in a few large holdings

3. Plan your Major Purchases 

While lifestyle spending covers everyday finances, you may also be planning for major purchases in the next 3 to 10 years, such as buying a vacation home, remodeling your current home, or going on the trip of a lifetime. Make those dreams come true by planning for the purchase today.

  • List your dreams and major purchase goals and determine the cost
  • Plan how you’ll pay for them setting aside funds or financing options like loans and lines of credit

4. Save for Education

If you have young children or grandchildren, you may want to start saving for college. Advanced planning can help avoid taking on a large amount of student debt.

  • Determine how much you want to contribute and if you want the student to take any loans
  • Start an education fund, such as 529 plan

5.  Prepare for the Unexpected

Financial security means planning and saving for a rainy day and unexpected emergencies. You’ll want to make sure you also have proper insurance in place for you and your family.

  • Set up an emergency fund and contribute to it regularly
  • Consider life insurance and/or disability insurance to protect you and your family
  • Review your insurance coverage each year to make sure it meets your needs

6.  Create or Review your Estate Plan

Essential documents, such as a will, trust, and financial and healthcare powers of attorney are necessary for proper estate and legacy planning. If you don’t yet have a will, this should be the first thing you do in the new year. 

  • Set up and review your estate plan
  • Review your beneficiaries on all of retirement accounts and insurance policies and make any changes needed
  • Make sure you tell someone in your family where to locate all your important documents

7.  Prepare for Retirement

Retirement planning comes in phases, and you’ll want to consider ways you can maintain your lifestyle in retirement. While maximizing your contributions is the best way to accumulate wealth, you’ll want to make sure your investments are allocated to maximize returns over the long run.

  • Max out your retirement account contributions each year
  • Increase your retirement savings if your income increases
  • If necessary, assess and reset your retirement expectations
  • Make sure your investments are properly allocated for your goals

8.  Plan your Charitable Giving

Charitable giving provides you and your family with an opportunity to make a difference. An important part of financial planning is making sure you're doing it in the most tax efficient way possible.

  • Incorporate charitable giving into your financial plan
  • Consider donating assets that have increased in value directly to your preferred philanthropic causes for tax efficiency or to a Donor Advised Fund (DAF)

9.  Track your Healthcare Spending

While healthcare enrollment is usually done in November, the new year is a good time to make sure you’re taking advantage of your benefits and maximizing financial tools such as your health saving accounts (HSA).

  • Use your HSA for qualified medical expenses
  • Prepare for healthcare costs in retirement by estimating and planning for predicted expenses

10.  Consider any Long-Term Care Needs 

Whether you’re caring for an aging parent or considering your own long-term care needs, you’ll want to understand how you’ll pay for it. Planning for the future will involve exploring insurance as well as reviewing assets that can be available.

  • Make a list of long-term care facilities and determine average costs
  • Determine whether long-term care insurance is feasible and affordable
  • Review your assets to determine if you will have enough should you need longer-term care
  • Make sure you communicate with your family how you would like to be cared for

If you need assistance staying on track toward your financial goals, we can work with you to design a financial plan that helps you prioritize your goals and work toward your next stage of life.  We can help you gain clarity and confidence to take the next step.