Money Manager’s New Year Checklist for 2016

  by Jesse Anderson

Money Manager's Checklist for 2016

by Anthony Obey

Money managers of every family need a solid checklist to work from as you chart your course for the New Year.

After all, there’s nothing like the New Year to get the blood pumping through your veins, inspiring visions of new possibilities and goals to be reached.

Sure, it’s common to drop New Year’s resolutions like a hot plate before January’s even set it, but for the disciplined and committed, it serves as vital adrenaline to keep us pressing forward in our retirement plans.

Here’s a New Year’s CHECKLIST to set new financial goals
from a Money Managers perspective

Review your budget – What’s your household income vs. your household expenses? Look for opportunities to cut costs and opportunities to increase income.

Is there a promotion you’re due for? Is there a subscription or two you never actually used this year that’s slowing draining dollars? Determine how you might plug the leaks and propel your income this year.

Just as every business looks at its income statement to see what came in (income), what went out (expenses), and what’s left (retained earnings) – you should do the same thing to ensure you’re where you want to be.

If all your expenses are paid and you’ve paid yourself in the form having a(n):

  • Emergency fund – Used for…emergencies
  • Savings funds – Used for short or longer-term one-time financial needs, such as a vacation, purchasing a new car, down payment for a home, etc.
  • Investment funds – Used by most people for income replacement in retirement

…then, you should ensure that you’ve filled all the above buckets to the appropriate levels. In other words, be sure you’ve maxed out your IRA account for the year and that your long-term retirement investment plans are on track.

Reviewing your budget also lets you see hidden ‘leeches’ that are slowing draining cash from you – such as memberships you need to cancel, and wasteful spending habits, like eating out too much; which costs you extra cash AND calories!

Finally, reviewing your budget can help you come to grips with the fact that you may need to figure out how you can earn more money. Are there other under-utilized income generation opportunities you should be pursuing, but aren’t? Use the motivation of a resolution for the New Year to pursue it!

To summarize, review your budget to find areas where you can cut costs and increase income.

Dump the Dept – One of the greatest enemies of positive cash-flow is dept payments, and the thing that lowers your net worth is liabilities – such as loans. Making interest payments is just money out the door so make a plan to pay something off this year, if you can; with the ultimate goal of becoming debt free ASAP.

We believe there are 2 types of debt: bad debt and better debt. It is important to eliminate bad debt as soon as possible.

The most popular types of bad debt include credit cards and car loans. These are debts with no asset or an asset that is declining in value. Eliminating these debts frees up funds for more important goals like emergency funds and investing for retirement. They also come with the highest interest rates. Removing these debts from your personal balance sheet will remove a huge burden to your financial situation.

Better debt is borrowing money to fund the purchase of an asset. The most popular better debt is a home loan. Others include student loans or using a loan to purchase a business. Using debt to purchase an appreciating asset or one will help generate future income can be a smart decision depending on your financial situation.

Assess your investments – Money Managers here at Snider Advisors highly recommend reviewing your investment portfolio, at least yearly.

You should ensure that your portfolio has performed the way you thought it should last year and be sure that your investment plan and asset allocations align with your risk tolerance, investment objectives and needs for the New Year; and according to your long-term retirement plan.

You should use a retirement calculator to plug in your numbers and see if you’re on track to a dream retirement or not. The Retirement Calculator provided by FINRA is a good one.

Organize your records – How’s your record-keeping skills? You should know where all your important documents, statements and receipts are.

Consolidate all of your important accounts into a single document that’s locked up so they can’t be stolen, along the username and password information. is a great online tool for keeping track of all your important accounts and protecting usernames and passwords.

Review your estate – If things have changed that affects your will, then set aside the time to make changes accordingly. And if you haven’t made a will yet, don’t procrastinate. Get it done. This is critically important if you have loved ones you’d like to give assets to.

At least annually your should review and update the beneficiaries on your retirement accounts. This includes all 401(k)s, IRAs, and Roth accounts. Your IRA will be divided according to the beneficiaries listed on the account, not your will.. For many, our retirement accounts are our largest assets. You must coordinate and update your beneficiaries to be in line with your estate plans after your death.

It’s no fun to think about, but, you’re not getting any younger and people die, unexpectedly, all the time. So do what responsible and loving people do and plan your estate.

Develop a tax strategy – You should consider the tax implications of all your financial activities. The name of the game is to minimize your tax obligation so you may want to call to discuss your situation with a professional.

Check your credit report – If you plan on using it, you should check your credit report, if you haven’t done so recently. It’s also a good practice to check it periodically, even if you don’t need a loan because of the potential of identity theft. It’s rampant today, so it’s quite important to be sure you’ve not been targeted.

Flesh out your 2016 financial calendar – Financial needs that you anticipate having this year are short-term needs. So you’ll need to plan on designating cash in your savings account for each specific need you have.

You should also list all important dates for the entire year, including tax filing dates, vacation, home improvement costs, or related personal expenses for the year, required minimum distributions from retirement accounts (if applicable) holiday celebration expenses, etc. That way you can see where you may need to shuffle money around in order to meet the higher priority needs or goals you’ll have this year.

Inspect your insurance policies – Insurance is critical for all stages of life. As you get older, medical expenses generally rise, so you need to review your policy to ensure you have the proper coverage.

Home and auto, health, life, disability and other insurances are important to have and consider.

With the ever-evolving nature of this new healthcare landscape, many people are being forced to change their health insurance plan every year.

And with uncertainty of 2016’s election year, it may be safe to say we’ll see more changes this year, too.

If you’re close to, at, or over the age of 65, Medicare and Medicaid benefits will play a big role in your healthcare needs. So take steps to ensure you’re properly set up to receive all your benefits.

If you need help or have questions regarding your financial or investment situation, contact one of the money managers here at Snider Advisors today.

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