The New Year has come and gone and now is the time to take a closer look at your finances to ensure they are in order. By implementing these five tips, you will be better prepared to manage your finances in 2018.
Tip #1: Set Goals
The first step in managing your finances for 2018 is to set short-, medium- and long-term goals. As part of your goal setting, you should create a budget that maps out your expected income, your anticipated expenses and how much you need to save and invest in order to meet your goals. Don’t forget to look into apps, desktop programs and other tech tools that can help you to automate your savings and spending plans. It’s an exciting new resource you should take advantage of. Not only will this make it easier for you to manage your finances, but it can also help you with staying on track toward reaching your goals.
Tip #2: Review Your Investments
After you have determined your financial goals, you should review your investments to ensure they are still in line with your goals and risk tolerances. With tax season fast approaching, now is a good time to meet with a qualified CPA financial advisor to determine if your investment mix needs rebalancing in order to be better aligned with your goals.
Tip #3: Check Insurance Coverage
At the start of the year, you should take some time to review your auto, home, liability and health insurance coverage. Over the last five years, the consumer price index for auto insurance has increased by more than 20 percent compared to an overall increase of 4.5 percent during this same period. In addition, many insurance companies increase their home and auto insurance premiums each year. Even small increases can add up over time.
By doing some comparison shopping and exploring your other options, you may be able to save yourself some significant money in 2018. Even if you choose to stay with the same provider, dropping some deductibles or removing unnecessary extra features within your policy can help you to save on your premiums. It is also a good idea to meet with your insurance agent to see if qualify for any discounts to further reduce your premium costs.
To save the most with health insurance, watch for open-enrollment periods when you can shop around for better coverage and cost savings. This is also the time to look at your flexible spending accounts to ensure you have spent all of the money available to you. Failure to use those dollars could mean an unnecessary forfeiture of the money you have in those accounts, so be sure you are aware of the deadlines and grace periods that these accounts provide.
Tip #4: Assess Retirement
Don’t forget to assess your retirement contributions and determine if any changes need to be made. If you haven’t been contributing to your 401(k) plan and taking full advantage of your employer match, for example, you should see if there is an option to “catch up”. After reviewing your goals, you may also determine that this is a good time to increase your IRA contributions to ensure you reach the limits this year. Keep in mind that the amount that you can contribute to a 401(k) retirement plan is increasing by $500 for 2018, so consider upping your contributions to take full advantage of this opportunity.
Tip #5: Get Beneficiaries in Order
People often overlook the importance of reviewing your beneficiaries, particularly if you have experienced any significant family events over the past year, such as marriage, a new birth, adoption, death or divorce. Check to be sure you have the proper beneficiaries designated for your will, life insurance, bank accounts, IRAs and other investments.
Effectively managing your finances in 2018 is easy with these five first steps. Having the philosophy to do better this year than you did last year can be a simple but effective way to ensure a healthy financial future.