What new goals are you trying to reach in 2019? Are you focusing on your physical health by joining a gym and cleaning up your diet? Are you throwing yourself into your career in order to earn a promotion? Or maybe, like millions of other people, you are using this year’s fresh start to find renewed motivation and make plans to get out of debt, save more, or reach a financial milestone such as purchasing a vacation home or retiring.
While setting goals can be a healthy way to focus on what matters in the new year, 80% of resolutions fail by February. (1) Your finances are too important to fail, so if you have dreams of making 2019 your best financial year yet, these 6 small but impactful steps will help you jump-start your financial plan and set a solid foundation for your financial life.
1. Create An Action Plan For Your Goals
Have you ever put your financial dreams in writing? Now is the time to do just that! Whether your dream is to save $100,000 in the next five years or fully fund your child’s college education, putting your thoughts on paper will help you turn your dreams into goals and your goals into a step-by-step plan. And since it will take time to reach your goals and plenty of obstacles will come up along the way, set attainable objectives and celebrate your progress.
Come up with deadlines to reach specific milestones on the way toward your overall goal. If you are trying to eliminate debt, for example, determine how much you will pay each month and what your subsequent debt amount will look like in six months, one year, or five years. It’s also important to use visual reminders to keep you on track and help you avoid discouragement. Whether you use a spreadsheet or a chart hung on your fridge door, measure your progress as time goes on, and remember that small steps add up to significant progress over time.
Be sure to reevaluate your goals frequently and make adjustments as needed. Having goals and an action plan to achieve your goals will give you perspective in your day-to-day decisions and help you prioritize your saving and spending.
2. Leverage Technology To Make Your Life Easier
Our lives are becoming increasingly busy, and it’s often the seemingly less important financial tasks that fall to the wayside. Thankfully, financial technology has come a long way. Take advantage of the tools available to streamline your financial life so you can devote your time and attention to the things that matter most.
Automating your bills and savings not only organizes your life but also has long-term benefits for your financial picture. Paying your bills automatically tends to improve your credit score, makes budgeting simpler, and can also make income tax preparation easier. Additionally, by automating your savings, you give yourself a chance to save before you can even touch the money.
If budgeting is your pain point, look for a budgeting platform that works for you, and don’t forget to talk to your financial professional to find out if they offer software that allows you to see all your accounts in one place so you can stay organized and track your progress toward your goals.
3. Eliminate Debt
It’s difficult to accumulate wealth and make progress toward your goals when you are paying high interest rates on things like credit cards, car loans, and student loans. Become relentless about reducing your debt and interest costs, and consolidate accounts where you can.
If you have a loan with a significantly higher interest rate than the others, you may want to work on paying off that one first. Or, if you’re feeling overwhelmed by debt, try paying off the loan with the smallest balance first, no matter the interest rate, in order to gain some momentum. Use a debt calculator to calculate out how long it will take to pay off your debt, then build extra payments into your monthly budget so you aren’t tempted to spend that money elsewhere.
Creating an emergency fund can help you avoid accumulating more debt. By setting up a liquid, easily accessible savings account, you won’t have to rely on debt to cover those inevitable life expenses, such as home repairs or medical bills. Create this cash cushion by putting aside money from each paycheck until you have enough to cover approximately three to six months’ worth of living expenses. You will never regret having an emergency fund at the ready.
4. Invest With Purpose
Anyone can close their eyes and pick a random mix of mutual funds to invest in, but having a customized retirement plan based on your circumstances, goals, and risk level is what will get you from point A to point B. Asset allocation is the most critical investment decision you can make, especially in our current volatile market.
Work with a financial professional to determine your risk tolerance level and create an investment strategy that will give your portfolio a clear sense of purpose. It’s also critical to rebalance on occasion to ensure your portfolio is still aligned with your goals and time horizon.
5. Mitigate Risks
No matter how hard you work to create a foolproof financial plan, there will always be risks and roadblocks that have the potential to get you off course. Inflation will decrease your purchasing power, and rising healthcare costs can eat away at your nest egg. Unexpected early retirement could change the time frame of your goals, tax changes could throw a wrench into your planning, and the loss of a spouse could impact your standard of living. Speak with your advisor to find ways to protect yourself against these risks.
6. Partner With A Financial Professional
Regardless of where you are in the planning process or what goals you have set for your financial life, we are here to support you, guide you, and help you navigate the challenges of life so you can attain your current and future financial needs. At Balboa Wealth Partners, our advisors specialize in overseeing your financial affairs and coordinating the day-to-day execution of your long-term financial plan, all with high-touch, responsive service. Let us help you jump-start your financial plan in 2019 by contacting me at 949-445-1465 or firstname.lastname@example.org to set up a no-obligation conversation.
Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With nearly three decades of industry experience, he has worked as both an advisor and executive level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high net-worth families, Jeff aims to help clients achieve their short-term and long-term goals and to worry less about their finances and more on their passions in life. Based in Orange County, he works with clients throughout Southern California, as well as Arizona, Oregon, and Washington. To learn more, connect with Jeff on LinkedIn or email email@example.com.
Advisory services provided by Balboa Wealth Partners, Inc, an Investment Adviser registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.
Securities offered through Chalice Capital Partners, LLC, member FINRA, SIPC.
Balboa offers advisory services independent of Chalice. Neither firm is affiliated.