As we move into 2020, its not only a new year but also a new decade! A lot of people like to focus on New Year resolutions and this year is no exception. Resolutions don’t have to be for dieting and exercise only and can also focus on finances. Here are our top five financial items that can help improve your financial health.
- Start Investing – Use the new year as an impetus to start investing or simply increase your existing retirement savings. Most retirement plans at work (401k’s, 403b’s) will see a slight increase in their contribution caps in 2020 to $19,500 with a $6,500 catch-up contribution if you are over age 50. Traditional and Roth IRA’s will remain unchanged at $6,000 a year with a $1,000 catch up if you are over age 50. You still have until tax-filing deadline to get your 2019 contributions completed.
- Complete a Financial Plan – Year-end is a great time to review your financial goals or set new ones for the new year and beyond. Focus on key tasks that will help you stay on track, such as budgeting, paying off debt, building your cash reserves, etc. Seek a financial advisor to help you in all aspects of planning, from cash flow to retirement and estate planning. Focus on living within your means or look for a higher paying job or side hustle to increase income.
- Check your credit report – Use the following website (https://www.annualcreditreport.com/index.action ) to check your credit reports for free from any of the three credit reporting agencies like Experian, Equifax or TransUnion. For an additional nominal fee, you can also get your score. Use these reports to monitor your credit report, close unwanted or old accounts, or place a freeze on your account to protect against unauthorized account opening.
- Review your existing investments and adjust your risk tolerance to your age or goals as needed. Make sure to rebalance your accounts especially after the large gains we had in 2019. Re-evaluate your work benefits and make sure you are properly covered for the unexpected events too.
- Assemble your financial team – Hiring a financial advisor can help provide you with the needed knowledge to navigate all aspects of your financial lives but also help control emotions that come with investing in the markets. Also, a good tax preparer or CPA along with an estate planning attorney are also key people to make sure all aspects of your plan are buttoned up and ready to tackle the new year!