Fourth Quarter 2013 – A Check List For the New Year

Like many people, I used to start the New Year off with a resolution (or five – lose weight, eat healthier, exercise more, spend less, save more), but by the end of January they were usually long forgotten. This year, I decided that instead of creating a particular resolution, I would create a check list of things that I would like to update or accomplish in the New Year. By doing this, I hope to avoid becoming overwhelmed by too much change all at once, and I will not feel bad if one or two things fail to get done, because hopefully there will be others that did. In addition to the above mentioned items, I believe the New Year is a great time to review personal finances, refresh goals, and maybe set some new priorities. Here are a few of the things I have on my checklist that you might want to add to yours.

Update/Create Your Budget: If you haven’t recently created or updated a budget, then something has probably changed since you did. Maybe you no longer get the newspaper, or you have a new child/ grandchild for whom you are making 529 contributions. Lay out your income and expenses (essential and discretionary) and do the math. If you’re coming up short, then it is time to prioritize. Decide where you can cut back, but always leave a line for savings.

Get on top of debt: Carrying too much debt can undermine the best-laid financial plans. To efficiently pay down nondeductible consumer debt, focus on the highest interest balances first.

Check your credit report: You’ve heard all the horror stories about identity theft (especially if you’re one of the 40 million people who shopped at Target between Nov. 29 and Dec. 15). At, you can get a free credit report from each of the three credit reporting agencies once a year. You could get all three reports, or even better, stagger it so that you request a free report from one of the bureaus every four months. You want to make sure the information is accurate and that no one is buying anything in your name – sticking you with debt and harming your credit score.

Get Organized: Make a list of all of your accounts and important documents, including where they are located. Consider consolidating to make things easier. Next, make a list of your advisors (financial, accountant, lawyer) with names and contact information.

Update your will: That is, if something big has happened, such as a new baby in the house, or if the news is less happy, and you’re newly divorced. If you do not already have a will, this might be a good time to draft one.

Check your insurance: I know I am always talking about an insurance check-up so if you haven’t done so, now would be a great time to review your insurance coverage. Health, auto, and homeowner’s insurance are a must. If you have dependents, consider life insurance.

Evaluate your retirement savings plan: If you haven’t started setting money aside for retirement, this would be a good time to start. Try to contribute 10 to 15 percent of your annual income, but if you can’t do that, at least put in your 401k as much as your employer will match. If you do not have a retirement option through your employer, make an appointment with your advisor to determine what is the best plan for you to start saving for your retirement years. If you are already making contributions to a qualified plan, try to increase the amount of withholding by 1% of your salary each year until you are able to reach the maximum contribution allowed (see back cover for 2013/2014 contribution limits). Set up your contributions to be automatic. I tend to spend it if I have it and forget about it if I don’t see it.

Review your portfolio: Make sure your investments still reflect your goals and feelings about risk. Make it a point to have at least an annual review with your advisor to discuss your goals and update your plan accordingly.

In summary, whether you have made a resolution or a checklist, include things that you want to do which are also attainable. Keep your list short and remember, life inevitably has plans of its own, which often do not coincide with ours, so enjoying the year should be first on the list.

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