For many of us, a new year equals new goals and resolutions. Whether you want to get healthier, improve relationship equals new goals and resolutions. Whether you want to get healthier, improve relationships or focus on your finances, it can be difficult to know where to start. Here are my four recommended resolutions for 2018.
1. Make your investments count
You work for your money, and it should work for you, too. Having a customized retirement plan based on your circumstances, goals and risk level is what will get you from point A to point B.
With the proper asset allocation, your portfolio can see healthy growth without risky investments. Sit down with a financial professional and create an investment philosophy that will give your portfolio a clear sense of purpose.
2. Eliminate debt
It’s really difficult to accumulate wealth and make purposeful investments when you are paying high interest rates on things like credit cards, car loans and student loans. If you are excited about conquering your goals, one of the first steps you need to take is to eliminate debt.
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.
3. Play defense with insurance
Securing your financial future isn’t just about saving and investing, but also about managing your risks. Your ability to earn an income affects almost every aspect of your life, and it must be protected. Your insurance needs will change based on your age, employment status, marital status, number of dependent children, etc.
Review your coverage each year to make sure you are fully covered and also to ensure you are not spending money on insurance that you don’t need. Double check your named beneficiaries as well to make sure they still reflect your preferences
4. Start defining your legacy
The beginning of the new year is an excellent time to reflect on what matters most to you and what you want your legacy to be. The work you are doing now — investing, saving and insuring — helps build the foundation on which your legacy is built. How can you support your favorite charities? What do you want to leave behind for your family? How can you create generational wealth? These are important questions that your financial adviser should be able to help you answer.
Regardless of what your current financial situation looks like, these four resolutions will help you kick-start your year and put you one step closer to reaching your financial goals.
Ash Toumayants is the founder of Strong Tower Associates, a retirement planning firm dedicated to helping clients in all stages of life prepare for retirement.