Get Financially Prepared for the New Year

By Marc C. Shaffer

With a new year peeking around the corner, now is a good time to review the financial strategies that are working well for you, your goals for the future, and take inventory of where you stand financially.

Do you want to save more next year?

Increasing your savings and reducing your spending, where possible, is a great place to start when preparing to step up your financial game in the new year.

Some simple strategies include paying yourself first (perhaps a portion of your salary automatically diverts to a savings account), reviewing your budget to see which “small expenses” are chipping away at your wealth and plan to combat them, and tackling debt so you’re not spending money on interest and can put that money toward savings.

Are there planned changes coming next year?

Consider if you plan to change jobs or houses, grow your family, have large expenses on the horizon or will be making major life changes like marriage or retirement. Make sure you account for these changes in your budget and plan to have cash flow available to cover these changes.

If unplanned changes or unexpected expenses occur next year, could you cover them?

If you don’t already have emergency savings built to last you a minimum of 3-6 months, now is the time to start budgeting and saving for this fund.

Are there major expenses coming up in the next few years?

If so, take time now to address your credit score so you’re attractive to lenders. With the increase in interest rates for mortgage, auto and other loans, being able to secure a loan near the lower side of average interest rates could potentially save you a lot of money.

Are you adequately addressing your long term goals?

Long term goals such as retirement funding, paying off a mortgage, or saving for your children’s education may not seem as critical when you have several years to go. However, not adequately addressing these goals each year could mean they arise before you’re financially ready.

Are you budgeting enough for these goals and investing in accounts earmarked for these milestones? Are you maximizing your employer-sponsored retirement plan or have you reached the age where you can make catch-up contributions in your retirement account? Meeting your long term goals may not happen if you’re not taking steps to meet them along the way.

What are your priorities for next year and beyond? Having a clear picture of what you want for the future can help you align your financial strategies with those priorities and a new year is a fresh start to making that happen. Set aside some time before the hustle and bustle of year-end to focus on making your next year the best it can be financially. If we can help you make that a reality, please let us know.

Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this content, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for you or your portfolio. Due to various factors, including changing market conditions, 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 newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Searcy Financial Services, Inc.

The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.  

Published for the blog on December 5, 2022 by Searcy Financial Services, your Overland Park, Kansas Fee-Only Financial Planner and Investment Manager.