- Document your financial goals with the entire family.
Including everyone in the goal setting process makes it more likely that you will have cooperation towards reaching your goals. Planning a Disney cruise? Let your kids know it is on the list and you are saving for it. It also gives you something to use when they are begging for a toy they don’t need. “We could buy this or we could put it in our Disney fund.”
- Update your balance sheet.
Reviewing your current investments and debts each year is a great way to stay on top of everything. It makes it harder to forget about that small 401(k) you left at your old job or to ignore the GAP credit card balance that doesn’t seem to be going away. Include your life insurance policies in the inventory to make sure you have them accounted for and start identifying room for improvement. Make sure you are prepared for emergencies or any big upcoming purchases such as a new car that can actually fit two car seats comfortably.
- Update your spending plan for the New Year.
What worked last year? What didn’t? Review your previous year’s spending and agree on where you can make adjustments. Try increasing your savings by a small amount and increasing the payments you are making towards paying down debt. Even an extra $1,000 / year ($83 / month) will make a difference.
- Review all of your insurance policies in detail with your provider or broker.
Our lives are always changing and things we don’t think are a big deal could require a change to your policies. Did you start employing a housekeeper? Inherit some jewelry? Your provider can usually provide a checklist for you to complete so they can see if any changes need to be made.
- Make sure your Estate Planning Documents are up to date.
Review your current estate planning documents to see if there need to be any updates. If you don’t have any estate planning documents yet, meet with an Estate Planning attorney to start the process. Everyone needs some level of estate planning, even if it is just a few basic documents. Don’t think that just because you don’t have children this doesn’t apply to you.
Review your credit report at least once a year to spot any bogus charges. This is a great way to spot identify theft as well as to make sure that you are not left unaware of any bills listed as outstanding. Medical bills are notorious for popping up unexpectedly. See NYTimes article.
Be thankful for what you accomplished in 2012 and get motivated to make financial progress this coming year. If you feel overwhelmed and it is keeping you from getting started, meet with a financial planner who can help you develop a plan that you can be excited about.