In our complicated world, there are a lot of things we have to do on a regular basis. Filling out your tax returns, renewing your auto licenses, and paying property taxes are just a few things you must do. So, it makes sense to try to simplify your life. Here are 12 goals (one each month) that you can work on in 2013.
1) Simplify the way you handle your day-to-day finances. Set up your bills to be paid automatically via some sort of automatic payment. Set up your savings contributions to be automatically deducted from your payroll or from your checking account.
2) Create an emergency fund. Car maintenance, appliance replacements, and other repairs aren’t such a big problem if you have money set aside. Build your emergency fund up to an amount that is enough so that you can pay three months of fixed expenses from it.
3) Organize your financial records. When you are organizing your 2012 tax records, get all of your financial records sorted and filed. Cull through old records and determine what should be destroyed and what should be saved.
4) Set up a monthly budget and stick to it.
5) Become more knowledgeable about financial matters. Purchase a good book on financial planning and READ IT. The more knowledgeable you are about financial matters, the more likely you are to be financially successful. For women, check out Prince Charming Isn’t Coming, by Barbara Stanny. The subtitle is “How Women Get Smart About Money.” This is a great book designed to equip women with psychological and financial tools that will help them take control of their financial futures.
6) Set up a college savings fund for your children, grandchildren, or great-grandchildren. Check into your statesponsored 529 Plan and set one up. Most plans start with contributions of as little as $25.
7) Review all of your insurance plans – Life, health, disability, homeowners, and long-term care plans. New features and benefits are continuously developed, but your old contract may not have the latest features. Sit down with your advisor and see if you have enough insurance and that you have all the features you need.
8) Create a retirement plan. One in five retirees acknowledges that they did no planning before they retired. Fifty percent did no planning until about 12 months before they retired. That leaves only 30% of us who sit down, work though the numbers, and make a retirement plan. Zig Ziglar has a saying – “If you aim for nothing, you will hit it every time.”
9) Create or update a will. Fifty percent of people die without a will - leaving their families and loved ones subject to estates that are settled according to state laws.
10) Pay down debt. Fidelity investments surveyed 1,018 baby-boomers that recently retired from their jobs (because of a voluntary retirement, lay-off, or disability). Forty-eight percent of them are entering retirement with significant debt, primarily home mortgage payments, car loans, or student loans for themselves, their spouse, or their children. 11) Sharpen the Saw. Stephen Covey coined the phrase as a metaphor to updating your skills and knowledge. A lumberjack would never attempt to cut down a tree without first sharpening his saw blade. If a lack of training is hindering your ability to advance in your career or make more income, spend time and energy updating your skills and making yourself more attractive to employers.
12) Just do it. Procrastination and waiting for everything to be perfect before starting something new is just an excuse for doing nothing. Start working on a new goal and stick with it until it becomes a habit. Financial success is a result of many small steps that lead to long-term financial peace and harmony. Wishing you a happy, prosperous, and financially worryfree 2013.
CFP®, FLMI, Annuity Product Manager