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End of Year Money Moves

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We’re getting close to the end of the year so I think it’s a good time to review how to set yourself up for success for next year. Here are some end-of-year money moves you should make.

Year in review

I think it’s important to reflect on the year that has been – financially, emotionally, physically, and spiritually. If you’re not evaluating your progress as a human, I think you are doing yourself a disservice.

We’ll stick with the finance side of things in this article. Did you achieve the goals you set out to reach when the year started? If you had a goal to pay off debt, did you? If you had a goal to increase your savings rate for retirement, did you?

I think that’s important for two reasons. One, you review your progress to see if you were successful or not. Two, you use this year’s progress to help set your target for next year. If you achieved your goal, you can set a higher target for next year. If you didn’t, maybe keep the same goal and try to hit it next year.

It’s also a good idea to review your investment/retirement portfolio at the end of the year. If you’re investing your retirement savings, there are some sectors or asset classes that performed better than others throughout the year. If that’s the case with your portfolio, the percentage you’re at now is probably different from where you started.

Typically, I like to leave it be, but if you’re in a stage of life where you have to be more selective, then being overweight in a risky asset is probably not a good idea. When you review your investment portfolio make sure that you’re still in good shape with regard to your risk tolerance and time horizon, and you’re pleased with your account’s performance.

Set goals for next year

After you review your progress from this year, set your goals for next year. If you saved more than you set out to at the beginning of the year, use the ACTUAL savings as your goal for next year. If you paid off some debt, redirect toward another one.

What happens if you don’t have any more debt? Congratulations! Then make sure your emergency savings are adequate. If it’s sufficient, beef up your retirement savings or something else you’re saving for.

When you’re making your money moves for next year, make sure you’re designating time to assess your progress throughout the year.

Related reading:

How to Set Investing Goals

Worthy Goals to Set and Crush

Disclaimer:

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

You’re Half Way Done! How’s Your 2012 Goal Setting Progress?

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Congratulations!

As we roll into July, you’re nearly half way through your 2012 goals.

How are you doing? If you’re a planner by nature, then you already know the answer to that question. Heck, you probably have a bar chart in your bedroom!

…you’re so romantic….

But, if you’re like the 90% of us who don’t actually keep day-to-day tabs on exactly how we’re doing relative to the things we said were important at the beginning of the year – this weekend’s a great time to reset the meter.

You probably started out 2012 with a list (check that: an idea) of what financial goals you’d like to accomplish. Items such as: pay off debt, build a cash reserve, save for a down payment, increase your retirement savings – important goals. But, did you actually capture it in writing? We’ve all heard it before – writing your goals down makes you more likely to hit them.

Let’s complete a little goal setting exercise to achieve the goals we set out to accomplish only six months ago.

 

Goal Setting In Five Easy Steps

 

Step 1: Make four columns on a piece of paper. Label them 1 year, 3 year, 10 year, and Lifetime. Now, for the next three minutes, think about all the things you want personally (toys, cars, houses, etc.) – we call these (“thing” goals) – and list each in the appropriate category. For example, if you want a Ferrari, but you’re thinking in the next 10 years, put “Ferrari” under the 10 year column.

After three minutes are up, spend another three minutes on money goals and another three minutes for spiritual / well-being goals. After nine minutes, you should have a list of all the 1, 3, 10, and Lifetime goals you could think of in the three areas of your life: things, money, and spiritual.

Step 2: Now, take 5 minutes to go through your columns, move things around and clean up your brain dump. Now your list should look a little more legible and it should be somewhat realistic.

Step 3: For our goal setting exercise, let’s take a look at all of your 1 and 3 year goals. Go through them and pick out one “thing” goal, one personal goal, and one money goal for each.

Step 4: You now have a total of 6 goals, three of which you’d like to accomplish in the next year. Never leave a goal setting session without taking action toward that goal. So, what you should do is make a list of the three to four action steps that must happen to make those goals a reality. Of those action steps – pick one that you will do TODAY to move forward.

Step 5: Here’s the final litmus test – you have to ask these questions:

1) Can I afford it? Meaning – can you do what’s necessary to make it happen? Can you actually do it?
2) Will you do it? Goals are nice, being able to accomplish them is nice…but if you won’t do what’s necessary…then what’s the point?

If you’ve gotten this far and you’ve found 3-6 goals that are reasonable you must take at least one little action step now. Don’t leave the goal planning table without taking at least one little step!

Do it now!

Congratulations. You’ve gone through a 30 minute goal planning session that will put you in position to reach your goals!

Great job!

How are your goals coming along? Let’s talk about our goals in the comments? Which ones are you on track for and where is your focus the second half of the year?

 

Photos: Woman writing: Risager; Life in 10 Yrs: lulumon athletica