Why Wait Until Next Year to Plan Your Future?

It seems like every fall I try to take some time to enjoy a few minutes of solitude and reflect on the experiences of the current year. This is also a time where I usually acknowledge that the to-do list that I created earlier in the year still reveals some unfinished business. As a financial planner, I’ll admit that this includes some things on my family’s financial planning checklist that still need some attention.

My quarterly asset allocation review is a few weeks overdue, we need to review our insurance coverage, and our wills need to be reviewed. If I really wanted to keep the procrastination train rolling down the tracks, it would be easy to just delay these best practice financial behaviors for a few more months. Of course, the better option is to turn these good intentions into an actual plan. And now that I’ve finished my graduate studies in financial planning at K-State, there finally appears to be some free time to attend to these personal financial matters.

How about you? Do you have unfinished financial business to take care of before the holiday rush? If you’re not sure of where to start, three of the most critical aspects of your financial life include Spending, Saving and Securing:

Spending:

  • Understand where your money goes.   Most Americans don’t know where much of their money is going.  You can take charge of this area of life and make significant strides in a short period of time.
  • Look for things in your monthly spending that can be reduced or eliminated with the resulting savings directed toward your most important financial goals.  If you keep a “spending log” for 30 days and track every dollar, you will probably be surprised at how some of the small expenses add up.

Saving:

  • Your short term savings goals could be an emergency fund, a car replacement fund, a down payment on a home, or any other goal that is meaningful to you.  Even saving a few dollars per month can be beneficial. Consider automating your savings through direct deposit.  The Daily Savings Calculator can show you how small amounts can add up over time.
  • Your long term goals can help you save for retirement, the education of your children, or other important goals.  Have you run a retirement calculation recently?  Have you increased your 401k contribution lately?  If not, use a retirement calculator now and once a year to monitor progress.

Securing:

  • In your financial review, think about securing your financial future and that of your family.  Do you have enough life insurance?  Have you put an estate plan into place?  When is the last time you reviewed the beneficiary designation on your life insurance, 401k and other financial vehicles?
  • Review your auto and homeowners/renters insurance at least annually.

Few things in life can produce the feeling of security that spending 1-2 hours reviewing your finances can provide.  A little bit of time now can provide decades of comfort.  Personally, I know that I will feel relieved to check off those last lingering items from my financial planning checklist.

 

 

 

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