Retirement Planning

Four Commitments for Financial Success

People often make resolutions to improve their lives, but more times than not, they fail without a proper plan to stick with. To truly succeed, you need to stop making resolutions and start making commitments.

Nowhere is a commitment more essential to success than when it comes to financial success. Here are four commitments you can make now that will help you understand what you need to do to reach financial success and, more importantly, the steps you need to take to make this happen.

#1 Declutter & Organize

One thing that keeps people from succeeding in reaching their financial goals is sloppy habits. Spending some time decluttering and organizing your financial and personal life will pay dividends in many ways.

To get started, set your vision, purge what you don’t need, layout your organization strategy, and then, get organized. Not just physical clutter, but digital clutter needs to be addressed as well.

For paper files, purge and shred everything that is not absolutely needed. Scan all files you do need so you have a digital copy of it. Then back up the digital copies to preserve them, maybe even storing off-site in the cloud or in a safe deposit box. Then shred the hard copies.

Email is a major source of digital clutter in peoples’ lives. Purge unneeded emails. Build a filing system within your email app to make things easier to manage. Use multiple files to easily find emails when needed. Then, most importantly, go through these files once a year and clean them out.

Monthly bills are another place where decluttering can go a long way. Go paperless and ask your vendors to send you bills electronically when possible. If you can only get paper invoices, once paid, scan the invoice to keep a digital copy and throw out the hard copy. Use auto bill pay so that you don’t have to worry about missing payment deadlines. Keep an online file for history, and make a new file for each tax year.

Next, think about decluttering your physical space. Think “trash to treasure” with furniture and other things in your home. When purging: sell, donate, give away or throw away. If you donate, scan the donation receipt for taxes next year! Use consignment shops, garage sales and online apps to help purge what you don’t want. Craig’s List, Facebook and Nextdoor are all great ways to both sell and give away what you no longer need.

#2 Reassess Your Protection

It pays to have a defensive strategy in your overall financial game plan. Not only does this include protecting your digital assets, but it also includes insurance and estate planning.

For digital protection, update your passwords. Use a different password for each account to help prevent hackers from gaining access to everything. Make sure your passwords are strong, and don’t write them down on a piece of paper sitting next to your computer! Consider signing up for an ID protection service. Also, put a passcode on devices such as your smartphone so they remain secure if you lose them.

Monitor your credit rating by going to to get your free annual report. Know your credit score, how your spending and savings habits affect it, and what you need to do to improve it. Guard your information. Ask if Social Security numbers are really needed on forms. Don’t give your credit card number to people who call you on the phone – instead call them back, looking up a number for the organization on a known, safe web site.

Review and update your insurance. Are your home and auto policies current, covering the full value of your house and reflecting your actual driving habits? Do you have disability coverage? Is your life insurance coverage enough to protect your loved ones? Do you understand what you have? Is it proper coverage? More importantly, is it the most efficient way to have that proper coverage?

Review and update any legal documents. This includes your will, power of attorney, and health directives. Are they in line with your current wishes? Have you had any changes in beneficiaries, executors, guardians, etc.? Don’t forget HIPPA policies at your physicians. Is there anyone you want to be able to talk to doctors on your behalf? Do you want to revoke anyone’s privileges? These are things that need to be reviewed often.

#3 Build Financial Efficiency

The number one thing to do here is to own your spending habits. People sometimes go into automatic pilot, spending on things without really thinking about why they are spending the money or how it fits into their overall financial goals.

Step one is to simply review your current spending, so you know where things are going, where the leaks are, and what might or should be changed. Then, set mindful goals by category. It’s okay to buy lunch, but having a goal budget for what you spend will help keep it aligned with your long-term plans. Make it fun and try to involve the whole family. Track your results weekly.

There are a variety of tools you can use to do this, including software you can purchase, tools you find online, or apps you can download. Your credit card companies and other financial service providers may have tools you can make use of. Or if you prefer to have printed receipts, mark up different spending categories on envelopes and place each receipt in the appropriate category to keep track of your spending that way.

Working with a financial professional can help uncover opportunities you didn’t know were possible and can help build financial efficiency. With the new tax plan, it’s important to review your tax withholdings with your CPA. You may also want to work with your financial professional to build a plan and then execute on it. This should include:

  • Emergency Fund
  • Short, Long-Term Goals
  • College Funding
  • Retirement Funding

Also, take a look at your debts to see if there is a way to consolidate them, reduce the interest you pay on them, or otherwise make your use of debt more efficient. On the asset side, work with your financial professional to understand your risk tolerance in your investments and how that should be reflected in the diversification of your investments.

#4 Take Stock

This area is a little more “blue sky,” but it is still essential for financial success:

  • Where do you want to be? Not just in a financial sense, but in every part of your life, because your finances touch so much of your life.
  • Do you understand what can prevent you from getting there? What are the risks? How can you de-risk your life?
  • Do you want to be more financially confident?

Finally, you need to make a clear action plan for making it happen. Assess where you are now, lay out goals, and build a list of action items. Your action plan should have dates associated with it. Put those dates into your calendar and make a commitment to making them happen.

This post is for informational purposes only and should not be considered as specific financial, legal or tax advice. Depending on your individual circumstances, the strategies discussed in this presentation may not be appropriate for your situation. The information in this material is not intended as tax or legal advice. Always consult your legal or tax professionals for specific information regarding your individual situation.

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