The new year can fill you with a sense of hope and expectation. There are new goals to reach and new challenges to tackle. Something that may be on your mind is finally taking control of your finances and making meaningful advances. Perhaps you’ve faced a financial challenge, or maybe you’ve never been able to get to a place where you feel like you’re progressing.
Through my years of working in the financial industry, I have found four basic steps you can take right now to give yourself clarity and confidence in your future.
Take stock: Get a Financial Snapshot
Find out where you are today by calculating your net worth. This may sound more complicated than it is. Start by writing a list of the things that you own: house, car, bank accounts, investment accounts, etc., with price amounts. Next, list out what you owe: mortgage, car loan, student loan, credit cards, and so forth, along with the amount you still owe on these items. Add up your assets (what you own), subtract your liabilities (what you owe), and viola: you have your net worth.
*Financial Planner Tip* Write this number down and repeat this exercise every New Year to see your progress from year to year.
Perform general maintenance: Review your contributions and beneficiaries
A quick tip to increase your retirement: see if you can take some of your last raise and bump up your 401(k) contributions. Or see if the annual limit for your ROTH IRA has increased since last year, and make sure you’re adding more if you can.
Also, look at each of your accounts to ensure your beneficiaries are updated. Would you want your retirement account unintentionally going to an ex-spouse? Or for one of your kids to be forgotten as a life insurance beneficiary?
Avoid bumps in the road
Sometimes, we can get so focused on progressing with our finances that we don’t consider what would happen if we faced an unforeseen difficulty. Two areas that are often uncomfortable to think about but are crucial in financial planning for your family are Long-Term Disability Insurance and Life Insurance.
Long-term disability insurance can be life-altering to your family if you cannot work for an extended period of time. And, of course, you need to consider how you would leave your loved ones if you passed away. When calculating how much life insurance you need, consider what it would take to replace your income, pay off debts, and accomplish goals like saving for college for your current children.
Develop a financial plan
Most importantly, update your financial plan on a consistent basis. Your plan is a comprehensive compilation and projection of your finances. It can show you potential shortfalls and help you make minor adjustments now to reach your goals. Your plan can also give you confidence and peace that you’re heading in the right direction.
Financial advisors at Whitaker-Myers Wealth Managers are experienced and skilled at creating comprehensive financial plans while keeping your financial goals in mind. We’d be honored to help bring financial peace to you in 2025. To learn more about these types of topics or industry information, subscribe to the Whitaker-Myers Wealth Managers channel on YouTube and visit our blog page, where our team members write weekly articles to help educate you and feel confident in your financial journey.
What you can do in 2025 to take control of your financial life
December 19, 2024
Tim Hilterman
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