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Here’s the first in a series of monthly posts focusing on meeting small, manageable financial objectives in order to create a path to overall financial success.


Now that the holidays are over, it’s a good time to take a moment and assess everything. This isn’t about making resolutions, but about solidifying your plans and creating a reminder of what you’re trying to accomplish. Put into words what your most pressing concerns are: Debt? Retirement? Savings? A home purchase? Something else? Is it a general sense of wanting to be “better with money”, or is there something more specific? Ideally, what will give you the most satisfaction twelve months from now? You will refer back to this throughout the year as you accomplish your tasks, and it will help keep you focused.


Next, make a list of the obstacles that you think are standing in your way. Actually, organize these obstacles into two lists: things you can control and things you cannot control. What can’t you control? What the stock market will do this year (both as a whole and which sectors or companies will out/underperform), where interest rates will go, global news events, and so on. All of these certainly impact your financial life, but this is a good chance to acknowledge the misguidedness of the notion that we can, in fact, predict what will happen with any of them. But you can learn from your reactions to these events (this week’s notable stock market drops are a good test - did that make you nervous?) and use that insight to make good decisions. Begin to think about how you can organize your finances so that the factors within your control (like savings rate, asset allocation, and expenses) are given proper priority.


Create the following beginning-of-year recap of your finances. Just gather the information for now, you don’t need to do anything with the information yet. But be thorough.  

  • Make a list of all of your accounts - bank, brokerage, retirement, current and former employer plans, etc. Add a general estimate of the current balance in each.

  • Make a list of all of your liabilities - credit cards, student loans, home loans, and anything else, along with the current balance and the terms (interest rate and remaining payment period)

  • Note your current contribution percentage, if any, to your employer plans. Also note your employer match (again, if any)

  • Calculate how much life insurance and disability insurance coverage you have, either through your employer as well as any additional policies you’ve purchased


On a more practical note, begin preparing to file your taxes. Yes, it’s early, and many documents won’t be ready yet. But start anyway - make a February appointment with your tax professional, or purchase software if you do your own, and gather all the information you do have into a folder (digital or physical), where you’ll add documents as they become available. Filing early allows you to guard against a fraudulent return being filed in your name, gives you plenty of time to prepare before the payment is due (by April 18, 2016) if you owe more than you expected, as well as to adjust withholding and contribution rates if you’d like to impact the amount owed or refunded next year.


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