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New Year, New Plan

As we enter a new year and begin prioritizing our New Year resolutions, it is important to take stock of your financial health by reviewing where you are now and where you want to be.  The beginning of the year is always a great time to adopt healthier financial habits, and it can begin by following some simple tips:

Update your balance sheet to determine where you are at the beginning of each New Year.

A financial balance sheet is a summary of what you own and what you owe.  Unlike a budget, it provides a big picture of where you are today rather than what you are spending your money on a day-to-day basis. Updating your balance sheet helps you determine what items you may want to focus on during the coming year. You may want to increase any debt payments to begin carving away at the liabilities portion of your balance sheet, or perhaps, you have no debt and would like to increase your savings and investment accounts.  Updating this critical portion of your financial plan will help determine if you are on track to accomplishing your long and short-term financial goals.

Review and manage your automatic and renewal subscriptions.

These expenses can add up and become a significant drain on your cash flow.  At the beginning of each year, sit down and review your credit card and bank statements for these set-it and forget-it payments. Some of these magazine subscriptions or entertainment streaming services may no longer fit into your lifestyle (or your new resolutions).  This simple clean up can lead to additional cash savings, which means you can reroute those funds to pay off debt or add to your retirement account.

Revisit your workplace retirement plans.

The single most important tip is to ensure you are maximizing your employer match.  You don’t want to leave free money on the table, especially if it means adding to your retirement account. The beginning of the year is an ideal time to increase your 401(k) contributions, especially if you have just received a salary increase at the end of the previous year.

Make your IRA contribution.

Review your IRA accounts and make any eligible annual contributions.  You may think that since the year has begun that you can no longer make an IRA contribution for the prior year, but in fact, you still can.  You have until April 15th, 2021, to make any missed portion of your 2020 allowable IRA contributions.

Confirm and update your beneficiaries on your retirement accounts.

Now is a good time to review your beneficiaries on all accounts. Being a legally binding document, beneficiary designations¹ will supersede what you may have listed in your Will or any other estate planning documents.  Life happens, and things change; while this is often overlooked, beneficiary designations are an important aspect of any financial plan to review periodically to ensure it reflects your current wishes.

Take a look at your current investment allocation.

Especially after a year of market volatility, allocate time to sit with your financial advisor to review your investment allocation to make any adjustments to your asset classes that may have drifted out of balance during the prior quarter or year.  Diversification is important in managing your portfolio risk, so rebalancing may be necessary to make any adjustments to stay on track with your target asset allocation and goals.

Start the year by improving your financial health and consider adopting these simple resolutions. Because saving more, cutting back on expenses, and investing can be a part of anyone’s New Year goals.  At Bridgeworth, we are here to help you start your new year in a financially healthy fashion, so contact one of our advisors to learn how to make your resolutions a reality.


There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio.  Diversification does not ensure against market risk. 

This content does not constitute legal, tax, accounting, financial, or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial, or investment professionals based on your specific circumstances. We do not make any warranties as to the accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.


¹ Why Beneficiary Designations Will Override Your Will