We all learned a lot about ourselves last year. Maybe we learned that our risk tolerance wasn’t nearly what we thought it was, or maybe we learned that six months of an emergency savings wasn’t a good thing to have only on a to-do list. With many painful lessons learned, this year is the year to finally commit to financial peace of mind. What needs to be done has all been said before, but this year resolve to get the ball in motion and finally breathe a sigh of relief that it is once and for all done.
Resolve to create a budget: Whether you put it on paper in a three ring binder or you purchase a sophisticated software system, make a budget. Tracking what you spend is the only way to see exactly where your money is going and where you can cut back. Not only make the budget, but live by the budget. Resolve to put your head on the pillow each night and say “I stayed on track”.
Resolve to get out of debt: The days of endless buying on credit are gone. By paying down your debt, you essentially are pocketing the amount you would have paid in interest while establishing a sense of freedom. Consider it a raise! If you want more money, stop giving it to your creditors. Resolve to pay cash.
Resolve to Save Money: If you are following steps one and two, you may find you are freeing up money to save. If the rising unemployment rates of 2009 have taught us anything, six months of emergency savings isn’t a luxury, it is a necessity.
Resolve to Re-evaluate your Risk Tolerance: For anyone who pulled money out of the market when the stock market plummeted, it is time to re-evaluate what your real risk tolerance is. No one likes to feel they are losing money, but if the downs in the market felt less like a tooth ache, and more like an abscess that needed to be extracted immediately, you need to sit down and reallocate your portfolio.
Resolve to have enough insurance: After the rollercoaster of 2009, why would any one want to lose sleep over situations beyond their control? Would your loved ones be able to survive if you were to die, get sick, need long term care? Making sure that your insurance needs are adequate and up to date is essential to the good health of your financial picture.
Resolve to hire a professional: If you were told that your car needed brakes, very few of us would be under the car replacing them. Why is it any different with our finances? If you feel overwhelmed by what needs to be done to insure financial health, call a professional. A financial planner can handle everything from budgeting, debt reduction, investment strategies, retirement planning, to tax issues and insurance needs. If you are not the do-it-yourself type, delegate to a professional.
A New Year has become synonymous in our culture to a new start. If you can commit to achieving financial freedom this year, I promise you your next year will be amazing. You may not be taller and thinner, but you sure will feel it! Contact us to learn how we can help.