The first days and weeks of a new year typically bring with it a list of goals or resolutions for the year ahead. Often times these will be related to an individual’s health, family time, work/life balance, etc. But we believe it is equally important to set your financial intentions for the year. Below are some ideas for financial life goals or resolutions to consider in 2021.
- Adjust Savings – For many, the amount you save to your 401(k) or other investment accounts was set a few years ago and hasn’t been revisited. We recommend reflecting on the prior year’s savings and determine if this can be increased. Perhaps you received a bonus at year-end or will receive a salary increase in 2021; consider allocating those extra dollars to savings. By increasing your 401(k) contribution by a few percentage points or setting up automatic contributions to your investment account, you are setting yourself up for a strong financial future. And having the savings done automatically helps you to pay yourself first before spending money on discretionary items.
- Clarity on Spending – As families get closer to retirement, it is important to understand what current spending looks like to determine if you have enough saved to support a similar lifestyle in retirement. As you get raises at work and compensation changes over the years, families tend to experience lifestyle creep – meaning their spending ends up increasing at the same pace as their raises, so savings is relatively unchanged. And after a few years of lifestyle creep, we often hear clients say, “Where does the money go?” The start of the year is a great time to review cash flow from the prior year to ensure spending is in line with your future goals.
- Update Estate Documents or Insurance – As life gets busy, we tend to put off what feels like non-urgent items in our financial life. Typically, this means waiting to finalize new estate documents with your attorney or making changes to your life insurance policy. Creating a goal to get these tasks completed and setting a deadline is a great way to ensure these important tasks get done.
- Financial Document Clean-up – While spring cleaning can be popular to get our households ready for summer, the start of a new year is a great time to clean up your financial documents. As you start to gather information for tax season, review the documents you have saved over the years to determine what needs to be kept and what you can shred.
If you have questions or would like your JNBA Advisory Team to help you achieve your financial resolutions this year, please let us know as we would be happy to assist.
Here’s to a healthy 2021!
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors, LLC.
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