If you’re like me, it’s easy to make your New Year's resolutions but hard to keep them. You may start off strong and have good intentions, but the demands of everyday life get in the way, or the goal becomes overwhelming. This is true for getting your financial house in order too.
While we help our clients with many financial issues, like retirement, tax and estate planning, there are still things they have to do themselves. I recommend tackling big goals in more manageable, bite-sized pieces, so I’ve laid out the following 12-month calendar to help you complete important financial planning tasks. Come December 31, you’ll have achieved big things for your finances and your family.
Whether it’s contributing to your 401k, starting a fund to cover your living expenses in an emergency or reallocating some of your splurge spending to savings, decide on an amount to save every month. Like losing weight, you’ll be more successful and stick to the plan if you have a goal amount and make it automatic. Have a certain percentage deducted from your paycheck to invest in your retirement plan at work, or set up an automatic savings plan at your bank.
Start early so you aren’t rushing around at the last minute collecting the information you need to file your taxes. You’ll need to do this whether you work with an accountant or file yourself. TurboTax has a comprehensive Tax Preparation Checklist that you can download for handy reference.
Sony, Target, JP Morgan, Home Depot, Ebay. Every week we’re hearing about the latest online security breach. This Information is Beautiful infographic is a powerful depiction of the World’s Biggest Data Breaches. While you can’t prevent someone from getting your information when companies that have it are hacked, there are things you can do to protect yourself from these predators.
Sign up for online credit protection from Identity Guard or LifeLock. Use 2-Step Verification for your email accounts. Our video, The Best Way to Protect Your Email From Being Hacked explains what it is and how to set it up. Stop using the same password for all of your online accounts. Instead, try one of the password managers like 1Password that will help you to generate strong passwords or LastPass that will generate new passwords and securely store them.
Review your 401k and account statements to know what you have saved so far. Then use one of the many online calculators like this one from Schwab or Bankrate.com to determine how much you’ll need in retirement. Don’t forget to add your estimated Social Security benefit. Just sign up at the Social Security website to retrieve your information online.
If it’s been more than a few years since you dusted off your will, or you have had any changes in your life like getting married, getting divorced, or had another child, then it’s time for a review. Give it a good read to make sure that the choice you made about who gets what are still relevant. Don’t have a will? Read my WTOP article: Estate planning basics: Three things you need besides a will - and why you need a will too to learn more.
Summer is a great time to learn something new especially if it improves your knowledge of money. So here’s a short list of my all-time favorite books that I give to my clients:
The Richest Man in Babylon by George S. Clason
Since 1920, this book has been teaching the wisdom for financial success through parable-like short stories set in ancient Babylon. The stories are so engaging that you’ll forget that you’re learning about personal finance.
Rich Dad, Poor Dad by Robert Kiyosaki
This book tells the tale of what Robert learned from two very different dads. His own dad was highly educated, but made poor decisions when it came to money, and the dad of a close friend who dropped out of school in eighth grade, but went on to become a multi-millionaire. Learning from the failures and successes of these two dads, Robert was able to retire at 47.
The Truth About Money by Rick Edelman
This is THE book about everything personal finance. But it’s not just numbers and calculations. It’s a roadmap with reasons to help you gain a better understanding of your money. The book starts with a quiz to show you how much you already know or don’t know about personal finance. This makes is easy to skip the chapters where ‘you got that’, and focus your attention where you need the most help.
Insurance gets a bad rap. It’s something we know we should have, but hate to pay for. Perhaps if we thought about insurance as income protection, we would appreciate its value more.
In a previous WTOP article, The Best Practices for a Healthy Financial Life, Part 3: Sharing Your Risk, I review three types of insurance you need to consider – life, long-term care and disability insurance. The article has links to insurance calculators, handy online services and other tips to keep you and your income protected.
You’ve heard me say this before – you need to know where your money is going if you want to achieve your financial goals. Online tools like Quicken.com or Mint.com make it so much easier now. The websites of these “giants of budgeting” have a wealth of easy-to-use tips to help you set and reach your goals.
You can defer up to $18,000 in an employer-based retirement plan, like a 401k or 403B. If you’re over 50, you can defer an additional $6,000. Before your next pay period, find out how much you have contributed. There’s still time to increase your contributions over the next several paychecks before year-end.
Many people in Washington have self-employment income. Even many executives and employees have secondary income for which they receive a 1099. Be sure you are utilizing all of your deductions and maximizing your retirement contributions. The self-employed can often set up an Individual (k) that allows for greater contributions than a SEP. Your CPA just completed the last of the corporate and personal tax returns and is waiting around for the year-end rush. Schedule a meeting now, and you’ll get his/her undivided attention.
Tis the season where you will be asked to donate by many organizations. Give back in a more focused way by deciding in advance how much you will give and which organizations will receive your generosity. Dan Pallotta is one of my favorite philanthropists, and I love the advice he gives in his 2013 TED Talk, The Way We Think About Charity is Dead Wrong. Charity Navigator and Givewell are great online resources to find a charity that aligns with your values.
The time to think about your taxes is before the year ends. After that, most tax planning opportunities are gone. Make sure you contact your accountant well before year-end especially if you had or will have a significant change in your income from this year to next. You can also go to TurboTax for timely tax-planning tips.
The 5 toughest questions you should be asking your financial advisor this quarter.
Barry Glassman is the founder and president of Glassman Wealth Services®, LLC. His vision for starting GWS was to deliver investment strategies and wealth management services typically available at the highest levels of wealth. Today, clients benefit from these sophisticated financial services targeted to meet their unique needs.
Along with the firm’s Chief Investment Officer, Barry leads a team of investment specialists that create asset allocation strategies for high-net worth families. They seek out the most attractive and appropriate investment ingredients, and then construct portfolios to meet our clients’ goals from capital preservation and income generation to tax-efficiency and growth.
Barry has been honored with Top Advisor awards from Barron’s, Washingtonian, Washington Business Journal, Financial Times, Reuters, Investment News, Institutional Investor, Virginia Business and Registered Rep to name a few.
His thought-leadership is driven by his desire to find new and interesting ways to educate investors. He has created interesting infographics and visuals to help explain complex financial concepts and shares these through his columns at Investment News and Forbes.com.
Barry also provides financial commentary to the media. He has appeared in The Wall Street Journal, Washington Post, Money, Business Week, Smart Money, Kiplinger’s Personal Finance, The Associated Press, Bloomberg, National Review, The International Herald Tribune, and USA Today. He has also appeared on several national television programs to include Wall Street Week with Louis Rukeyser, World News Tonight with Peter Jennings, CNBC and Bloomberg News.
A graduate of George Washington University, Barry has, in post graduate work through the College for Financial Planning, achieved his status as a CERTIFIED FINANCIAL PLANNER™ practitioner. He has also earned the Certified Funds Specialist designation. He is an Investment Advisor Representative and has retained the 65 securities registration.
Additionally, Barry is past-Chairman of the National Financial Planning Association’s Tax Sub-Committee and past-president and Chairman of the Financial Planning Association’s National Capital Area Chapter. He served on the Board of Directors of the International Association for Financial Planning for a total of six years.