OR WAIT 15 SECS
As you ease back into work following the holiday season, take some time to ensure your 2016 begins with smart financial decisions.
Delicious eggnog is behind us, and 2016 is upon us. The financial sins of 2015, if indeed there were any, are in the rear view mirror, and the opportunity to get on a productive financial course is here. This is the first of a short series of articles on getting 2016 off to a great start.
1. Build a really good budget. Budgeting isn’t everyone’s strong suit, and you may be getting by just fine without one. But as the calendar changes over, consider developing at least a basic budget, even if you don’t look at it every day and don’t account for every dollar of income and expenditure. No budget is perfect, and no budget has to be. But as described here, a sound budget is not only the roadmap to a successful financial future, it can be the foundation for it.
2. Stock, credit, future. Take stock of your stocks (and the rest of your portfolio), pull a free credit report, and reassess your financial goals. The holidays can be very busy for most, so you may have missed an opportunity to look at the overall performance of your 2015 portfolio. Take that opportunity during the dog days of winter, before the allure of spring takes you back outside. While you’re at it, take advantage of one of the free credit report services — preferably at AnnualCreditReport.com — to do a maintenance check on your credit rating. (Other companies that advertise free credit reports often engage in a bait-and-switch in which people who don’t read the fine print closely are enrolled in clubs and other nonsense that ultimately lead to charges.) Check your reports for inaccuracies and alarm bells, and have a general sense of your credit rating, which can impact borrowing power and overall credit availability.
3. Want some advice? Get advice. I have talked about the pros and cons of working with and advisor here and here. So much of this decision comes down to personal choice and what type of investor you are. You can read those articles for more information, but for now consider that the two biggest fears of working with an advisor — fear of stepping out of your comfort zone and a lack of trust giving access to outside persons – can both be overcome through time and effort. Working with the right professional can be an important step in this year’s financial journey. The beginning of the year is a good time to think about this, because your advisor may also be able to provide some tax guidance, which will come in handy over the next few months.
4. Review and update. If you didn’t get a chance to do it last year, look at your life, homeowners, auto, and other insurance to make sure your beneficiaries are updated and that your coverage still reflects your needs. Loyalty to one fine insurance company may be important to you, but it never hurts to shop around and find out what other insurers are charging for policies similar to yours. If nothing else, you can go to your current insurer, explain that you’d like them to keep your business, but ask for lower costs comparable to other reputable companies.
The actions you take at the beginning of the year can set the tone for a financially successful 2016. In future installments, we’ll look at setting your 2016 financial calendar, financial vehicles to reconsider in 2016, and ways to optimize your savings and investments.