When you look ahead to this year…which is you?

When you look ahead to this year…which is you?

Our last blog talked about projecting your taxes, so you can see what’s coming and plan for it. A lot of what planners do is look ahead to see what is coming and what could be coming, so you can have what you need ready.  At Fiscal Fitness Clubs, we’ve broken down these tasks and given you step by step instructions and support to make it easier, because we know that managing your money and doing planning can seem overwhelming in our busy lives. This blog identifies all the tasks and the reasons behind them. Besides routine bill activities, these take approximately 2 hours a month but reap big benefits.

1. Bill Management & Paperwork Management Systems: Having a pattern for paying bills, addressing problems, filing and scanning documents will help you keep everything up to date and improve or maintain your credit score. You also want to have a filing system that’s easy to implement and maintain that will let you put your hands on documents when you need them. This will minimize the amount of paper you keep AND help you be personally (or by a proxy) prepared to act quickly to a curveball that life can throw at you. Once you have it set up, each January clean out your files, gather tax support documents, and get rid of unwanted paper. This alone will help simplify all other financial tasks during the year….voila!

2. Year End Review & Goal Planning: Seeing how your net worth has changed, how much you spend in a year, and your progress towards your goals along with a few other key indicators can go a long way in helping you achieve your goals. Research shows that goals that aren’t measured frequently don’t get met. We recommend having a list of items that you look at and track year to year (i.e. emergency reserves, debt ratios, projected retirement income, debt free date, credit score, etc.).  Once you are clear on how far you’ve come, it’s time to determine what you want to focus on this year that will lead you to get what you want now and in the future. Don’t put this one off…pick your two areas to change and goals to fund.

3. Taxes: Most people think of doing taxes once a year, but you also need to plot your strategies for taking advantage of the tax code and accomplishing your goals, which means you also need to project your taxes for the next year.

4. Investments Review:  Since asset allocation determines somewhere between 85% to 96% of your return, it’s most important that you evaluate your portfolio as a whole while looking at both asset classes and risk (measured by standard deviation). Once you’ve determined how much should be in each asset class, it’s not too hard to then evaluate your options for performance, risk, and costs. With the right measures, it’s easy to compare the alternatives and make good choices. Once you learn to ask the right questions of advisors, it’s almost a piece of cake!

5. Death & Disability Protection Check: These two risks can knock any plan out of the game, so it makes sense to project how you and/or your family would be impacted and making sure a plan is in place to minimize it. Checking policies, beneficiary designations, and making sure someone else can address the policy if you can’t, are all critical steps to avoid having a crisis on top of a crisis. Having the right insurance, understanding your benefits, having a crisis budget that could be put in place plus a healthy emergency fund can prepare you for these potential crises. By the way, these two issues impact almost 30% of the population before age 65. Why not be prepared?

6. Retirement & Long Term Care Planning: Annual projections of your retirement income and incorporating a plan for addressing long-term care expenses will go a long way to bringing peace of mind and reduce financial burdens on a family. We do this to ensure you keep the issue in front of you and that you take the necessary steps to prepare for a comfortable retirement that’s not fraught with financial stress.

7. Goal Planning including Debt reduction:  Tracking your goals and making adjustments in your budget so you can meet them makes it much more likely you’ll achieve them.  Buying a home, having a child, college funding, vacations, cars, etc. all require funding and attention. Generally, creating a debt free date is also part of people’s goals and are tied to their potential retirement date. Using the right strategies to reduce debt and improve your credit score can take serious time off your debt free date. Reviewing the rules, benefits and how you’re using debt has big rewards. Taking the time to track and create strategies that get you to your goals is worth 2 hours 1 time a year!

8. Legal and Estate Planning:  Once a year review of your documents, updating them or creating new ones so they are current and accomplish what you want is only part of the task.  Making sure that your proxy has what they need, knows where to find documents, knows your wishes and what you want to happen is all part of the project. If you are an executor, trustee, a medical or financial power of attorney for someone else, it makes sense to be prepared, too.

9. Liability Insurance Review: Nobody likes doing it but examining your homeowners, umbrella, auto and other liability coverage is a critical routine task. Making sure that the policies are coordinated and that there are no gaps or missing coverage is just as important. This review can also save you money!  Just a little work, in the beginning, will make this an easy task every year.

10. Employee Benefits Planning:  Don’t waste the opportunity to leverage the options your employer is providing you. Learning how to evaluate medical coverage, tax benefits, group discounts, and the free money only makes sense. We do the projections of what you need for retirement, life insurance, disability coverage and tax strategies in prior classes. By this point, it’s about taking the time to see if you can do it more efficiently through your employer or private options.

11. Tax Review and Year-End Strategy Planning:  With the end of the year near, it’s time for a last ditch effort to get what you want from your money. The year-end tax strategies identify if there is anything you can still do to put money into your goals vs. giving it to the IRS. By reviewing your goals, you also can go into the holiday season remembering what’s important to you and resolve to stick to your budget so you get what you really want. Two hours can save you bunches and reduce the holiday bills.

12. New Year’s Resolutions:  This assignment is light because the end of the year is heavy with distractions and obligations. In the last week of the year, we ask you to reflect on the last year, update your key indicators, and think about what different things you want for the upcoming year.

The idea is to take your tasks and make them manageable by breaking them down into small steps. Those small steps can reap big rewards, debt free dates can be cut in half, retirement gets on track, and you’ll be prepared to address the curveballs life throws with a whole lot less financial stress.  Get these tasks on your calendar.  Set aside the time each month and tame your money so you get what you want!

Fiscal Fitness Clubs has all the tools, resources, and coaching from CERTIFIED FINANCIAL PLANNERS™ to make accomplishing these tasks simple and effective. But whether you use us or not, you should still do these things so you can get some smooth sailing!

Interested in becoming a member of Fiscal Fitness Clubs?  Send us an email or set up a call HERE.

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