The end of one year and the beginning of another presents you with an opportunity for a fresh start. Now is a good time to get your finances in order.
Here are ten tips to help you get started:
1. Create a financial plan
Be realistic and specific when determining your short-term (buying a new car next year) and long-term (retirement in 10 years) goals. Reassess your plan at least annually. If your objectives have changed since you implemented the plan, decide if you need to rethink your strategies.
2. Create a budget
A budget is the starting point for helping you reach your financial goals. First, calculate the money you have coming in versus the money you have going out for both essential items (shelter, food, etc.) and “wanted” items (a 60-inch flat screen). Next, determine if there are ways to cut your expenditures. Finally, set savings goals that take into account your financial objectives.
3. Check your credit report.
You are entitled to one free credit report per year (www.annualcreditreport.com).
4. Establish an emergency fund
How would you pay your bills if you lost your job or broke your leg? An emergency fund is meant to be a readily accessible stash of cash for you to use only in the case of an emergency. How much is enough? It depends on whom you ask. The general rule of thumb is to have enough money on hand to pay your bills for three months.
5. Check your balances
Gains and/or losses in investment accounts can skew your asset weightings. Check your balances at least annually to determine whether you need to re-balance/re-allocate your assets.
6. Rollover retirement plan assets into an IRA
Did you recently leave a job? If so, what are your plans for your retirement account? Now may be a good time to rollover your retirement plan assets into an IRA.
7. Check your beneficiaries
8. Fully fund your IRA
Don’t forget to fully fund your IRA each year. Instead of writing one big check at tax time, remember you always have the option to make smaller contributions throughout the year.
9. Check the interest rates on your credit cards, savings account, etc.
Shop around to determine whether you are getting the best rates available.
10. Clean out your file cabinet
Get rid of old statements and receipts that are taking up space in your file drawers, but don’t just throw them in the trash. Be sure to shred sensitive documents.
All investments are subject to risk, including the possible loss of the money you invest.Past performance does not guarantee future results. There is no guarantee that any particular asset allocation, or mix of funds, or any particular mutual fund, will meet your investment objectives or provide you with a given level of income.