THE TOP 5 PERSONAL FINANCE ‘TO DO’s’ for 2019!
It’s hard to know where to start, but the beauty of a new year is that fresh feeling and resolve to do better! 2019 will be an interesting year as we begin to get accustomed to the new tax laws. This isn’t the only thing we’re worried or confused about! Hopefully this guideline and resources will provide a little bit of help as you navigate through the first month of the new year.
REVIEW TAX RELATED CHANGES: Take a look at the Forbes article which discusses new tax brackets and standard deductions, retirement contribution limits, and major changes taking place in 2019.
CREATE A BUDGET: Reflect and think through your goals. Create a budget that includes your net income, your fixed and variable expenses, that leaves room for paying down debt and saving towards your goals. My favorite platform to do this and keep track of spending is Every Dollar. The very best constant personal finance overview is of course, Mint!
REVIEW YOUR RETIREMENT PLAN: Most of us think mostly about a 401K or an IRA (and if you’re lucky enough, your pension plan). Yes, this is important especially because of the tax benefits or if your company matches, but this isn’t the only road to consider. Most people know about Social Security, but don’t realize that they can actually go online now, create their profile and check out what they would receive if they were to collect at 62, 67 or 69. It is important to have an idea what this number looks like, especially if you are closer to being able to collect social security. This will also help you decide whether an investment property is worth considering, or if you need to contribute further to your 401K or IRA. It’s a good idea to work backwards; how much money would you like to live off of a year? And of course, if you’re one of the lucky few, double check what exactly your pension plan is and if it will be enough to retire off of! Here’s a great 401k calculator by Nerdwallet that should be helpful!
REVIEW WHAT YOUR DEBT IS ACTUALLY COSTING YOU: Debt isn’t free! In fact it’s extremely expensive thanks to amortization. And some debt is more expensive than other debt! The most crippling liability tends to be larger student loan related debt. Next tends to be credit card related. It is important that you go into each individual loan or credit card you have, check the interest rate, and see what you owe and are actually covering in interest on a monthly basis. Remember, you only reduce your loans when you cover the full interest + pay down principal. Here is a Student Loan Calculator and a Credit Card Payment Calculator both by BankRate that can give you a better sense of how you’re doing. Don’t forget to also take a look at your mortgage as well as your autoloan or any other personal loan you may have to also be aware of what your loan is costing you.
REVIEW YOUR BENEFITS: Most of us know generally what benefits we have, but we don’t really understand the details. This is a good time to take a look at the benefits package you have and make sure you are taking full advantage of it. For example, you should review your short and long term disability amounts you would collect, how much your life or accidental death insurance covers and if it’s enough for your family to survive without you. What would your unemployment benefits or severance pay would cover? Take advantage of your health and dental insurance, get an FSA account for the tax benefits and get the check ups and work you need. Make sure if your company matches 401K plans you opt-in! It’s free money and tax deferred. What is your maternity or paternity leave policy? Check again how much paid vacation, personal leave and sick leave you have accumulated and will get for this year. Check if you get tuition assistance, any profit sharing, public transportation, gym, egg freezing perks.
We hope this will help you in your planning for 2019! If you feel you would benefit from a personal financial consultation in which we do a full review of your personal finances, feel free to shoot us an email to set up an appointment. Best of luck this year!