Make These Your Priorities in January

Did you know you can make the simplest changes to improve your finances? 

Wills and estate planning – Amazingly, many individuals and families have a spouse, children, and substantial assets but an outdated or even no will at all.   There are vast dangers in ignoring estate and probate law – failure to be proactive can have catastrophic results.  Skilled attorneys and financial professionals can ask you the right questions and help you avoid these potential pitfalls. 

An end to debit cards – Aside from convenience, there is virtually no reason you should ever use a debit card.  Firstly, you are granting a vendor access to your checking account at the point of sale – seldom a good idea.  Secondly, in the event of a dispute with the merchant, you will have far less recourse if the funds have already been deducted from your account.  Finally, you are far better off using a credit card that can protect you as a consumer and offer you rewards for usage.

Maximizing your retirement – This includes 401k and other employer-provided plans but you have many other options as well.  Although you may not be entitled to a deduction, you can contribute into your IRA each year.  You also have the option of converting your Traditional IRA to a Roth IRA.  In limited circumstances, permanent insurance may be an option worth considering.  Maximizing contributions into HSA accounts can also be very beneficial in the long run. 

A real plan for education – It is crucial to have a calculated plan for financing your children’s education.  To begin planning, you should have a sense of what schools they might attend, the current tuition and fees for those schools, and the appropriate rate of inflation so that you can estimate the overall costs.  We encourage clients to have a multi-pronged approach to education planning which can include 529 savings plans, taxable investment accounts and, if necessary, home equity and earned income savings. 

Investment allocation – It is a very good idea to review all of your investment accounts to be sure that the securities you hold align with your goals.  Your account allocation should reflect your objectives, risk tolerance, and future anticipated income.  If you are unable to say with confidence how your 401k account is being invested, then you definitely need to investigate and make adjustments.  This also applies to any other investment account including IRA’s, taxable accounts and 529 accounts for your children.

One additional thought for this year – now that tax reform appears imminent, check with your CPA to see how you will be affected.  Depending upon your financial position, the new laws may create opportunities and/or compel you to pay a little more in taxes.

You have a far greater chance of achieving your financial goals if you begin the planning process early.  Not everyone has the proper appreciation of exactly how much they will need for their children’s education or for their own retirement.  You have a finite amount of resources – be sure they are allocated properly.