By: Andrew Rosen, CFP®, CEP®

We all make New Year’s resolutions to better our lives for the upcoming year.  So, why not make 2017 the year in which you give serious attention to your finances?  I’ve come up with these helpful tips to get you started on the right foot in 2017.

  1. Max that 401(k) – This is my number one tip for most people. Benefit from the tax deferred growth and free employer money.  If you haven’t already, make every effort you can to contribute the IRS maximum to your employer sponsored plan ($18,000 if under 50 with an additional $6,000 catch-up for 50 or older).
  2. Max That H.S.A. – If you’ve maximized your 401(k), now it’s time to divert your dollars to the brilliant H.S.A vehicle. This allows you to get both pre-tax savings and tax-free withdrawals.  In addition medical costs are skyrocketing, so a bigger cushion in a medical savings account is better.  In 2017, the maximum is $6,750 and an additional $1,000 once attaining the age of 55.
  3. Pay Off Bad Debt – My second biggest advice statement to people is get out of destructive bad debt like credit cards. Typically the rates are insanely high and can snowball into an untenable situation.  Take those yearend bonuses and bad debt laying around, or at the very least put a serious dent into paying it down.
  4. Refinance That Mortgage – Speaking of debt, Federal Chairwoman Janet Yellen voted to raise interest rates recently. This means the well anticipated interest rates are on the move and for the first time in over a decade they are going up.  The smart move, if you haven’t addressed your high older interest rate mortgage, is refinance into something still historically low, and possibly even shorten the term of these debts.
  5. Increase Those Savings – ‘Tis the season’ to get those annual raises.  Use those raises this year to both increase your living standard, along with increasing your savings for the future.  If all you do is take your annual raise and increase your life style, you’ll fall into what I call “lifestyle creep.” Then you’ll never be able to maintain your lifestyle in retirement.  So, if your raise is 5% take 2-3% and increase your savings first to a retirement plan.
  6. Get That Estate Planning Done – How many times have you said to yourself or your significant other: we should really get a will and other estate planning documents completed this year. Then the year ends, and you realize another year passed without these crucial documents.  It’s not easy to discuss these things, but it needs to be done.  Unfortunately tragedy strikes when we least expect, it so don’t put yourself in this potentially difficult situation.
  7. Do a Quick Insurance Audit – Sticking with the theme above, tragedy strikes when we least expect it. So, make an effort this year to really look at those liability insurances.  Many aspects of our lives are exposed and it’s very important to make sure we are properly covered.  Analyze the risks on everything–from life insurance, to disability insurance, to health, and P&C insurances.  Make sure you’ve spoken to a professional who can ensure you’ve taken the appropriate steps to mitigating these potential risks.
  8. Reallocate Those Investment Accounts – It’s possible a lot has changed in your investment accounts and risk tolerance in the past year. Use this fresh start to make sure your investments are in line with your current goals and objectives.  Sometimes even if your risk tolerance hasn’t changed, your investment make up has. So, it is always a good practice to realign with your recommended blend of investments.
  9. Review College Savings Strategy – If you’re planning on paying for some portion of college tuition, there is no better time to start a savings than now. 529 plans typically offer the best tax advantages for college expenses and come highly recommended.
  10. Clean Up That Resume – Don’t get complacent in that job of yours! Why not get that resume in order, since you’ll never know when you’ll need it.  Most people except what their boss gives them as a raise.  In my experience the quickest way to increase that income is to look outside your current employer.  You’ll  sometimes get a very surprising offer from an outside employer.   At very least, once you have these figures you’ll know your market worth and can use it to negotiate with your current employer. Just make sure you don’t tell my current employees this tip!
  11. Budget – There are a lot of tools and resources out there to help you get your spending in order. Unless you can really understand what it costs to be you it makes any sort of financial planning difficult.  Start with the basics–get a grip on your spending patterns, so you can know what is feasible and what is not.
  12. Hire a Financial Planner – Most people lack the time, focus, expertise, and resources to handle all of this alone. It’s common and understandable I recommend hiring  a trained professional; someone to guide you on the path to financial security.  I may be biased, but I truly believe your outcome is typically better working with a professional than going at it alone.

If you enjoyed this blog feel free to sign up to get them on a regular basis.  I’d like to wish everyone a wonderful 2017 and remember the journey of a thousand miles starts with the first step.

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Andrew Rosen

In his role as Financial Planner, Andrew forges lifelong relationships with clients.  He coaches them through all stages of life and guides them to better achieve their life goals.  For more information about Andrew or the other firm partners, Kyle Hill and David Levy, click the link below.

Find out more about Andrew Rosen, CFP®, CEP®
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