With 2015 coming to a close, it is now the time to get a strong stance over your finances. By understanding and conceptualizing your finances holistically, you will be able to evaluate, plan, and strategize the best ways moving forward into the New Year. This type of organizational understanding will give you the ability to view your financial and personal goals and adjust any necessary steps that can alter your finances in a better and more lucrative manner.
Below, you will find five ways to get your retirement planning back on track before that New Years Eve ball hits the ground. This type of action plan will help alleviate those financial concerns and set you off on the right path for 2016. Take a look!
1. Review Your Investments
If you have not looked at your accounts in the past three-to-six months, now is the time to check in on them. Any allocations, investment performances, or contribution rates should be noted. The main questions to ask are: Is this where you wanted to be before the year hit? Why or Why not? Is there room to save more? What does this mean for your long-term financial goals? By reviewing and evaluating your investments, you will be able to understand what changes you can make or additional cash you can save to alter your portfolio in a better way. In addition, your 401K plan may remove certain funds from its offerings. Be sure to review where that money is currently sitting and make necessary adjustments.
2. Create a Plan for Extra Cash
Remember, at the end of the day, you are working for a specific retirement goal or goals. If you were lucky enough to have been given a specific bonus or increase in income before the year-end, plan a place for how you’ll allocate it before you receive it. Do not make the mistake of spending it on miscellaneous items. If, however, there are certain expenses you have to make such as gifts or credit card debt, try breaking the amount up so that you can save at least 20%. At the end of the day, you need to look at the bigger picture. Understand that this money can truly make an impact in shaping your financial future.
3. Know Your Money: Evaluate Cost and Expenses
During the holiday times, people happen to overestimate the amount they are spending on gifts and presents. If you are one of those individuals, be sure you understand the amount you are spending. Take an hour or so to review your overall cash flow, whether it is annually or monthly. Then try and conceptualize the expenses you pay monthly and the big expenses, such as holiday presents, that you had to endure this month. If you find the figures to be shocking, try and plan what you can do to get back on your retirement path. If they seem to be stable, look into how you can improve your financial retirement plan.
4. Create Financial Goals for 2016
Another year means another opportunity to move into your financial goal! As you head into the New Year, lay out an overall savings goal that is specific, measurable, and attainable. Say you want to save $5,000.00 in your Roth IRA by the summer time or you want to have at least $1000.00 or more a month going to your retirement plan. By setting these goals down to a specific number, you will be able to target and track your progress in the most effective and efficient manner.
5. Preplan for the Big Moments
Like any person, we will eventually end up spending. I am not saying that you should not spend. Rather you should be smart about your expenses. Start off by mapping out those big financial expenses for the year. This can range from vacation to graduation gifts. By preplanning, you will be able to strategically and financially plan out the most affective and impactful way to save. Keep in mind, be absolutely clear on your financial goals for this year. While you may spend, you do not want to go overboard where your retirement plan can be put at a hold.