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Six Steps for Financial Well Being in 2019

Written by Brian Puckett, CFP®, CPA/PFS, Attorney at Law.

Are you ready to get a jump on 2019? Here are six financial best practices for the year ahead. Pick a few of them or take on the entire list. Either way, you’ll be that much further ahead.

 1.Don’t React. Just stand firm. Seriously. If you have a well-structured investment portfolio, guided by a relevant investment plan, your best move in hyperactive markets is to let that plan be your guide. That can mean doing nothing new with your holdings. Of course, investment inaction can be one of the hardest things to (not) do when the market is in turmoil. Then again, your best move when shares of the Great Companies of America and the World are selling at a discount is to buy more.

2.Double down on your planning. A “do nothing” approach to turbulent markets hinges on having a relevant plan in place to guide your portfolio. A new year is a great time to tend to your investment plan – or create one, if you haven’t done so. Have any of your personal goals changed, or will they soon? How might this impact your investment mix? Have market conditions put your portfolio ahead of or behind schedule? It’s time well spent to periodically ensure your plan remains aligned with your personal circumstances.

 3.Prepare for the unknown with a rainy-day fund. Time will tell whether 2019 markets are friendly, foul, or a mix of both. Having enough liquid, rainy-day reserves to carry you through rough patches is a best practice no matter what lies ahead. Knowing your near-term spending needs are covered should help with the practical and emotional challenges involved in leaving the rest of your portfolio fully invested as planned, even if markets take a turn for the worse.

4.Redirect your energy to contributing financial factors. When you’re staying the course with your investments, you can direct your attention to advanced planning issues. It’s worth reviewing the financial landscape annually to identify areas needing attention. Maybe you’ve got a debt load to reduce, or an estate plan to update. Perhaps it’s been too long since you’ve reviewed your insurance, or you’d like to calibrate your philanthropic goals to the latest tax laws. Refreshing any or all of these items may do more for your financial success than fussing over the stock market’s daily gyrations.

5.Perform a cybersecurity audit. Protecting yourself against cybercriminals is another excellent use of your time. With the new year, consider revisiting basic, protective steps, such as changing key passwords on your most sensitive login accounts; reviewing your credit reports; and placing a freeze on your credit file, to block unauthorized access. These actions apply to your entire household; unfortunately, even minor children are now at heightened risk of identity theft.

6.Have “that money talk” with your kids, parents, or both. When is the last time you held any conversations about your family wealth? It’s never too soon to begin preparing your minor children for a financially literate adulthood. As they mature, their financial independence rarely happens by accident; it takes continuing discussions. Then, as you and your parents age, you and your kids must prepare to step in and assist if dementia, disability, or death takes a toll. There also can be ongoing conversations related to any legacy you’d like to leave as a family. For all these considerations and more, an annual “money talk” can be critical to successful outcomes.

 

So, there you have it: six creative ways to bolster your financial well-being while the stock market does whatever it will in the year ahead. While this list is by no means exhaustive, we hope you’ll find it an approachable number to take on, with two critical caveats.

 

First, we’ve got a bonus “financial best practice” to add to the list: Above all else, remember what your money is for. Money is meant to fund the moments that matter to you.

 

So, be it resolved for the year ahead: Next time you find your stomach tightening at the latest frightening or exciting financial news, tune it out. Walk away. Go do something you love, with those whose company you cherish. Not only will this feel better, it’s likely to be better for your financial well-being.

 

Second, we recognize that each of these “easy” best practices aren’t always so easy to implement. We could readily write pages and pages on how to tackle each one.

 

But instead of writing about them, we’d love to help you do them. At Align Wealth Management, we work with families every day and over the years to convert their dreams into plans, and their plans into achievements. We hope you’ll be in touch in the new year, so we can do the same for you.