It is once again the time for a new year to begin and like most of us I feel the need to get organized. This year will be different! I will figure out a better system to keep my life in order. All of my closets and all of the paperwork will be sorted out and I will start the year with a clean slate. I am sure that I am not alone with these sentiments…. as it is certainly the time to get focused!
So, here are five financial resolutions for 2013!
1) Stay Diversified – Your portfolio should be well-diversified and should include financial assets from a variety of types and countries including equities, fixed income, real estate companies and cash to balance your overall risk. To manage your investment risks, your well-diversified portfolio should be re-balanced to ensure that the targeted allocation percentage remain close to targets. Now would be a good time for this review.
2) Set up a Budget for the New Year – Your personal situation may have changed over the course of a year and if so, a new budget may be needed to help you achieve the goals that you have set. The budget should include any major purchases or expenses that you are planning in the short term. Make sure that your advisor is aware of any major changes that you are planning so these adjustments can be incorporated into your overall financial plan.
3) Review the new tax laws that may affect you – Speak with your tax accountant to make sure that you do not pay more taxes than are necessary during the year. This includes reviewing your W-2 information if your personal situation has changed.
4) Review Insurance needs – In order to protect your assets, review your current insurance policies and determine if you are adequately covered. You should also review your beneficiary designations to make sure that the arrangements on your retirement accounts are correct and continue to reflect your wishes. And if you have had major life changes that requires a review of your overall estate plan, be sure to discuss with your advisor.
5) Set up a meeting with your financial advisor to review your plan and discuss any changes that may have occurred throughout the past year. It is a good time to make sure that your advisor is reviewing your accounts and monitoring any changes that may be necessary. If your advisor isn’t offering the explanations that you need, it may be a good time to get a second opinion.
Remember to continue to plan for your retirement. Determine if you can increase the amount of money that you are saving for retirement and if the retirement account allocation percentage includes a large enough percentage in global stock ownership.
Have a happy and prosperous 2013!