It’s a new decade!

Today is an excellent time to reevaluate your financial situation. Here are 13 simple financial tips for assessing your financial situation and making sure you aren’t missing anything big with regards to your future.

As always, reach out to Tilly with questions. We’re happy to help answer your basic questions at no cost.

1. Inventory Your Personal Loans:

If you owe money, ask yourself:

  • Is the interest rate charged still fair given the current environment? Would it make sense to refinance the loan?
  • Does the loan “balloon” come due soon? If so, should you refinance today because interest rates are low versus later when the balloon forces you into a new loan?
  • Do you have adequate cash to reduce the loan balance?
  • If you have credit card debt, do you have a plan to reduce its interest rate or balances this year?
2. Set up an “Automatic” Savings Account:

The biggest challenge with saving money is discipline. If you try to save by remembering to make a transfer or write a check into savings, it often won’t happen. To overcome, set up a monthly, automatic draft from your regular checking account into your savings/investment account. Contact your bank to setup an efficient saving account.

3. Find a Collaborator or Mentor:

You don’t necessarily need an expensive financial advisor to get good advice. Consider finding a friend, a relative, or a mentor to trade financial ideas to improve how you invest, save, and manage your money. Bouncing ideas back and forth is a good way to consider fresh perspectives about how to address a challenge.

4. Manage Your Spending with Budget Software:

Do you know how much you spend and where you spend it? Personally, I use Intuit’s Quicken. Each month, I download my transactions from my bank into Quicken and ensure each expense is in the proper category. The process is easy, and the benefits are huge. In addition to Quicken, check out Mint, Tiller, PersonalCapital, or Good Budget.

5. Create a Top-Down Budget:

Top down budgets allow you to prioritize your most important expenses first. In other words, deal with the big picture before you try to deal with the details. Our November blog, “How to Create a Top Down Budget” shows you how.

6. Keep More Cash On-Hand:

Too many of us believe our 401-K plans, IRAs, or investments are our savings. They are not. These are longer term investments. Everyone needs a nest egg, a solid cash buffer for emergencies or a rainy day. Is this a good time to save some cash? Always!

7. Allocate Your Assets:

Are you properly diversified given your risk appetite? For example, are 90% of your investments hinged to the stock market, yet ideally, do you feel more comfortable with 70% in stocks? If so, consider selling some stocks and buying some bonds, real estate or something else to get the right balance.

8. Learn Some New Investment Terms:

The financial world has so many fancy terms, so it’s easy to become overwhelmed and give up on learning them. Instead, try to learn about one new term each week or each month. The best way to do this is when you read or hear a term look it up on Investopedia. Let’s practice now, try looking up and learning about REITs.

9. Take Advantage of Retirement Plan Company Matches:

Four words: Best. Deal. In. Town. If the company you work for offers a matching retirement plan or recently improved its matching percentage, did you take full advantage? Hint, you SHOULD!

10. Use Tax-Advantaged Investment Plans:

There’s no sense paying the IRS extra money that should be yours during retirement. Therefore, could some of your money be transferred into an IRA, a Roth IRA, or something else to reduce your taxes? Download “Tilly’s Guide to Smart Investing” to learn more about the various types of tax-advantaged accounts.

11. Vet Your Advisory Fees:

How much are you paying your financial advisors annually? How much are you paying the mutual funds or other investment companies that have your money? If you’re paying them a percentage of “assets under management” how much is that equate to in dollars? Learn more by reading “The True Cost of Financial Advice.”

12. Donate Stocks with Capital Gains, Not Cash:

If you have a stock portfolio and donate to charity, consider donating a stock to the organization that has a large capital gain to avoid paying taxes. You still get the tax deduction from your income, but you also avoid paying the capital gains in the future when you sell that stock. Here is some straightforward advice from Kiplinger as to how.

13. Get Prepared for Market Changes:

Markets go up, markets go down. When markets go down, and they most certain will, are you prepared to withstand the storm? For example, during downturns will you be forced to sell assets at low prices? Or, are you prepared with lower-risk assets in your portfolio?

There you have it! With Tilly we can help you enjoy this new decade by making the smart financial choices that will help you ENJOY your future decades.