Year End Planning: Map Out Next Year


As you cross things off your list for 2012, keep in mind that some advanced planning  may help smooth the path going forward. It’s not too early to get your ducks in a row for 2013. Here are some important considerations:

  • Reflect back. Take a look back at your financial decisions over the past 12 months. What did you do well and what do you wish you could change? If you meet with a financial planner, review your action items for the year to make sure you’re on track. Once you’ve had a chance to take your pulse, you can organize your priorities for what is most important to tackle next year.
  • What’s Changing? It’s only natural that we think of things in 12-month calendar year chunks. In that sense, 2013 seems new and different. Often there can be changes that come along the way – new priorities, a raise or change in job, different personal circumstances such as planning retirement or sending a kid off to college, or external changes such as potential changes in tax rates or estate rules. Take the time to evaluate your situation based upon anticipated changes.
  • Make Commitments. Studies touted by behavioral economists like Shlomo Benartzi and Richard Thaler show that making a commitment to boost your savings for some future date (such as when you get a raise) increase the likelihood that you’ll follow through down the road. You can apply this type of pre-planning to a variety of financial decisions by mapping out your game plan in advance. Make sure that you take the time to put your commitments in writing. Putting something on paper will increase your commitment and intent. Additionally, if you really want to hold yourself accountable, sign your John Hancock to the documentation.

Not sure what should take priority? Some areas are always appropriate. Establishing or reviewing your budget makes sense at least annually. Savings goals are ever-changing and should be spruced up at least once a year. If you’ve got lingering holes in your financial plan like missing estate documents put those high on the list. Finally, if you’ve been meaning to talk to a financial planner but haven’t gotten a chance yet, put it on the list for sometime soon.

Melissa Joy, CFP®is Partner and Director of Investments at Center for Financial Planning, Inc. In 2011 and 2012, Melissa was honored by Financial Advisor magazine in the inaugural Research All Star List. In addition to her frequent contributions to Money Centered blogs, she writes frequent investment updates at The Center and is regularly quoted in national media publications including The Chicago Tribune, Investment News, and Morningstar Advisor.

Financial Advisor magazine's inaugural Research All Star List is based on job function of the person evaluated, fund selections and evaluation process used, study of rejected fund examples, and evaluation of challenges faced in the job and actions taken to overcome those challenges. Evaluations are independently conducted by Financial Advisor Magazine.