At Center for Financial Planning, our most satisfying accomplishments have little to do with annual returns or personal accolades. Every day, we help people determine their life’s goals and the ways they can plan to achieve these aspirational objectives. In our 25-year history, we have shared in the thrill of success with many clients and that is what keeps us going. Resolutions seem like a familiar cousin to the planning work we do with clients. A resolution may come more out of tradition and habit than the careful, systematic analysis of comprehensive financial planning and life planning, but similarities linger nonetheless.
Are you looking for a step toward financial well-being in the New Year? Here are twelve ideas for resolutions in the hopes that your resolutions for 2012 can turn into amazing financial successes down the road.
- Stop putting off financial planning. Is financial planning on the back burner because it’s too intimidating or depressing? Make an appointment to talk with a Certified Financial Planner™ to develop a plan customized just for you.
- Bone up on identity theft. Identity theft is an increasing threat to your money and personal information. Learn how to navigate safely through the wired world through personal research or a seminar – we’ll be hosting one in mid-2012 for clients and friends of the firm. Don’t hesitate to contact us if you’re interested in participating.
- Write your five-year plan. My colleague and Center for Financial Planning Partner, Matthew Chope, CFP®, says he owes much of his success to annual updates to his five-year plan. Try laying out goals in four areas: personal, professional, family, and health.
- Create a budget. Lead Planner Sandy Adams, CFP®, suggests that you map out your budget with itemized savings for retirement, education, and identified short and long-term goals. It will help you track where your money is going each month.
- Create or update your estate plan. Estate planning is supposed to be built to last, but it still represents a snapshot of your life. The questions you must answer for estate planning are difficult but also extremely important. They can also be fluid and need to be examined so take a look this year.
- Review your retirement plan contributions. Maximum contributions are going up in 2012. Take your retirement contributions off auto-pilot and examine your savings strategy in employer-sponsored accounts. Too many people give up benefits or invest just enough to receive their employer match. Now is the time to adjust and save more.
- Establish or review your asset allocation. The mix of asset classes for investments can be a critical factor in an investor’s success. Review your allocation with your investment professional. If you do-it-yourself, make sure that you have established an asset allocation framework for your portfolio. Note: Asset allocation does not assure a profit or protect against loss.
- Set an example. Founding Partner Dan Boyce, CFP®, leads by example and I have been blessed with his mentorship in the twelve years that we’ve worked together. This year, Dan is going one step further by adding mentoring to his New Year’s resolutions. In his own words: “Intentionally being a positive role model in 2012 for one or more young people by articulating my values in the way I spend my money, or in the way I lead my life.” Well said, Dan!
- Simplify your finances: I have been married four years, but we have yet to consolidate accounts. I wish I could say there was a good reason, but frankly, my husband and I just put off some short-term pain and accordingly, undermined our ultimate goal of simplified finances. I’m putting this goal in print now: in 2012 we will consolidate bank accounts after we consult with our financial planner. You may benefit from reducing your bank accounts or consolidating old company investment plans as well.
- Be authentic. Lead Planner Laurie Renchik, CFP®, notes that some years she is gunning to jump out of the gates for the New Year and other times are more reserved. That’s okay. Accept your own personal feelings to determine how much you want to take on.
- Enhance your charitable gifting with planning. Don't wait until next December to think about gifting, lay out your gifting plans at the beginning of the year for maximum effect. You may be able to coordinate monetary gifts with time for more meaningful gifting. An intentional charitable plan may lead to different priorities or more emphasis on a specific charity. There are also opportunities for planned strategies such as gifting with appreciated stock for tax benefits or, if your employer is like the Center, the ability to use company paid time off to volunteer for non-profits.
- Renew your current best practices. Don’t become another resolution statistic with the best of intentions but little follow through. If you’re doing good things, keep it up! My colleague Angela Palacios, CFP®, notes that each January she must wade through novice enthusiasm at the gym that she uses twelve months a year. Sticking it out is a gift to herself that pays off!
Even if you're not a traditional resolution maker, consider committing to at least a few of the above. When it comes to your financial health, there's no time like the present. And the small traditional act of setting a resolution can lead to great things. Don’t miss the opportunity to make something of your resolutions in 2012!