Happy Financial New Year!

December 28, 2018

You could have a better year if you just do these things.

You may think that all resolutions are a big waste of time.

Yet I’ve worked with a lot of people who’ve used the turn-of-the-year to discard damaging financial habits, and who’ve improved their lives (and finances) in the process.

Of course, not everyone needs to make changes. But many of us do.

And I’m willing to bet that within the five points below, there’s at least one resolution that you can embrace.

When it comes to your savings, health, investments, and retirement planning, what are some of the things you should do this year?

Here are five:

1) Optimize Your Savings and Investments

Market going haywire? Check. Start of a New Year? Check. Worried about what might happen? A little worry is natural, but there are things you can do that should help put your mind at ease.

Talk to your advisor and make sure you diversify within asset classes.
Investments are either tax-efficient or tax-inefficient. (Both have a place in a well-managed plan.) Know the difference and work with your advisor to invest your savings in a way that seeks to maximize upside and minimize downside.

The recent market chaos was, frankly, overdue.

It could go on for years or stop tomorrow. No one knows what’s going to happen.

So, rather than get itchy and jump out of the market, simply make sure your investments, relative to your retirement timeline, are balanced, tax efficient, and that your risk tolerances are in line with both your age and when you’ll need the money.

2) Get Your Employer Match

While your grandparents probably had a pension, you likely have (or had) access to a 401(k).

But are you leaving free money on the table?

About 95 percent of 401(k) plans offer some sort of employer match.^[1]Let’s say your company offers you a 100 percent match, with a cap at 6 percent of your salaried contribution. If you are 50 years old and make $150,000 a year, and you can manage to contribute $375 per paycheck for 10 years, your employer would be kicking in an additional $90,000 toward your retirement.

3) Pay Off Your Mortgage the Day You Retire

I’m a huge proponent of retiring debt free, and this includes doing everything you can to pay off your mortgage before you retire.

Do you want to stop working in 5 years? Or maybe 10? How much extra would you have to pay each month to retire without a mortgage? Use Bankrate’s simple mortgage payoff calculator, and then make a New Year’s resolution to automatically “up” your monthly payment and retire mortgage free.

4) Get Your Finances in Shape by Exercising

Here’s a completely original New Year’s resolution: begin to exercise. (I take it you’ve heard this one before.) But there’s more to it than meets the eye.

According to numerous studies and surveys on the subject, people who exercise, or people who start to exercise, even in mid-life, end up wealthier and live longer than people who don’t exercise.^[2]

First, even walking 1.5 miles (20 minutes) 4 times a week, should:

Improve your overall health.
Boost your energy.
Decrease stress.
Improve your sleep.
Help control your weight.
Increase blood flow to the brain.

It’s pretty straightforward: Exercise helps you feel better, think more clearly, and it improves energy. Those factors can go a long way toward helping you to make better life and financial decisions. Want more proof? Finnish researchers recently studied 2,500 sets of twins and discovered that the twin who exercised regularly actually earned more money, and reported higher life satisfaction levels, than the more sedentary twin.^[3]

5) Meet with Your Financial Advisor

If you’re a client of Allworth Financial, you know we place a premium on updating your financial plan when you experience major changes in your life.

But what if you don’t have an advisor?

A good advisor proactively monitors your investment allocations to help you account for fluctuations in the economy or markets, but have your financial goals or your life recently changed? Are you getting married or divorced? Do you need to update the beneficiaries on your retirement accounts? Have you purchased a new house, gotten a raise, started a new business, or taken a new job? Is a child getting ready to graduate from college? Have you or your partner experienced a health setback?

When you experience a major life event, or when your goals or your financial situation changes, you need to speak with an advisor.

Conclusion

Your finances, your New Year’s resolutions, and your health could be related.

With 2019 knocking on the door, now is a great time to determine not only what you need to do to keep your finances on track for the future, but to make a resolution to improve your health from this moment forward, as well.

Want more information on these (or related) topics? Contact us today.

[1] Nerdwallet Arielle O’shea, April 25th, 2016

[2] Good Housekeeping February 10th, 2014

[3] Good Housekeeping February 10th, 2014

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^✢ Scott Hanson, Investment Advisor 2005, 25 most influential people in the financial services industry. The ranking reflects 25 people who Investment Advisor magazine believes have had or will have the greatest influence on the financial services industry.

^✼Pat McClain, InvestmentNews 2014, Invest in Others Community Service Award, presented to an advisor who has made an outstanding impact on a community through managerial contributions to a non-profit organization.

^†Financial Times, FT 300 Top Registered Investment Advisers, June 2019. The ranking reflects six areas of consideration including the company's years in existence, industry certifications of key employees, AUM, asset growth, SEC compliance record and online accessibility and calculates a numeric score for each company.

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