Jump-start your financial plan for 2022

Jump-Start Your Financial Plan for 2022!

By Jeff Gilbert

2021 is officially behind us. If you’re like many of us who had high hopes when we rang in 2021, only to experience another intense year of the pandemic, economic shutdown and uncertainty, and slow road back to “normal,” it might be overwhelming to think about planning for a new year.  But the good news is that there are actionable steps you can implement to manage your finances effectively and truly make 2022 the fresh start you desire. Here are four ways you can get started today.

1. Set Financial Goals

The first way to jump-start your financial plan is to set financial goals. Do you have a goal for your finances or are you just crossing your fingers and hoping you have enough for the lifestyle you want? 

Specific goals with defined timelines will help to determine the best course of action, including how much risk you can and should take with your money. For instance, if you’re looking for a guaranteed source of income, then you will probably want to stick with investments that will provide long-term security. Conversely, if you are looking for substantial growth, then you might want to take on more risk and invest less conservatively. Every dollar in your portfolio should be working toward a specific goal.

Remember that the best goals will be SMART: 

  • Specific: The more you can identify exactly what you’re saving for, the easier it will be to work toward it. 
  • Measurable: As much as possible, try to identify how much your financial goal will cost. Do the research to figure out what you need to save so that you’re able to see tangible progress along the way. 
  • Attainable: Make sure your goal is realistic and achievable. This might require some self-reflection or reevaluation of your priorities.
  • Relevant: Ask yourself which goals align with your core values. Remember that your finite assets will be split amongst your seemingly infinite list of wants. The more you can scale back your list to what is truly relevant, the quicker you’ll be able to achieve each goal.
  • Timely: Identify the timeline for each goal so that you can prioritize which ones need to be addressed first and how much risk you can afford to take.

2. Strengthen Your Savings

If there’s one thing the last two years have taught us, it’s that it’s crucial to prepare for the unpredictable. Whether it be a pandemic, a lost job, or rising rates of inflation, sufficient savings can mean the difference between staying afloat during uncertain times and not having enough when you need it most. 

If you’re not saving already, take steps to start putting a portion of your income away every month. Usually 10-15% of pre-tax income is a good guideline. Ideally, it is recommended that most people should have at least 3-6 months’ worth of non-discretionary expenses saved in a highly liquid, easily accessible emergency fund before saving toward other goals. Either way, consistent savings are the cornerstone of any solid financial plan.

3. Reevaluate the Risk in Your Portfolio

As mentioned in Step 1, risk is fundamental to investing. Even “investing” by hiding cash under your mattress involves risk, since there’s always the chance of a break-in or increased inflation eating away at its value. To jump-start your financial plan in 2022, be sure to reevaluate the amount of risk you are taking in your overall portfolio. 

It’s not uncommon for a portfolio to become unbalanced as the market ebbs and flows. What may have started out as a 60/40 allocation between stocks and bonds can easily become a 70/30 or 80/20 allocation, which is a significant difference in risk level. You may also find that you are too heavily concentrated in one type of asset or in one company’s stock. If this is the case for you, rebalancing and diversification should be explored. 

Though risk is fundamental to investing, it’s also crucial that you aren’t overexposed to unnecessary risks. Take steps to evaluate your risk tolerance, based on your unique financial circumstances, stage of life, and personality, and be sure your investments align.

4. Find a Financial Partner

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 navigate any financial challenges you may face. Partnering with a financial professional is a great way to take control of your finances and get a jump-start on the future. 

At Balboa Wealth Partners, we have the tools and expertise to help you manage and coordinate your financial affairs, advocating for you as you pursue your financial goals. If you want personalized support as you navigate the challenges of life and make decisions that impact your future, give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com.

About Jeff

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 over 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, worry less about their finances, and focus more on their life’s passions. Based in Orange County, Jeff works with clients throughout the entire country. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor 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.

 

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