Happy New Year!
In my financial planning business, I work with three distinct groups:
- Those who are just starting out in their professional and investing lives (ages 25-30)
- People who are building careers, families, and savings portfolios (30s – 50s)
- Pre-retirees or people who have recently retired (50s and beyond)
Following are the New Year’s Resolutions that I hope each age group will make and keep.
Group 1 – 20s and 30s
- Create a savings account for emergencies or job loss. Fund it with 3-6 months’ of essential expenses. Do not touch this money for vacations, shoes, or other non-emergency purchases.
- Sign up for your 401(k) or 403(b) contributing at least the amount your company matches. Set up an automatic account builder to raise your contributions to 10% within 3 years.
- Work on paying down consumer debt.
Group 2 – 30s through 50s
- Save at least 10% of all income for retirement.
- Try saying “no” to your kids every once in a while. For example, “No, I will not buy you an iPhone 6. Earn your own money to pay for it,” to your teenager. Or, “No, I will not pay for 100% for your out-of-state private school college expenses. Start hunting for scholarships, jobs, or a less expensive school.” Exercising your “no” muscle will give you the strength to protect your own finances and your kids the confidence that they can make their own dreams happen without the Bank of Mom and Dad.
- Meet with a financial planner to see if your investments are properly diversified.
Group 3 – Pre-retirees
- Actually write down what you spend on a monthly basis. You must know this information to be successful in retirement.
- Think of a part-time job you could do for the first 3 years of retirement. This will ease your transition both emotionally and financially.
- Meet with a financial planner to assess your retirement readiness BEFORE you tell your employer that you are leaving your job next month.
Enjoy your New Year’s celebrations! I hope to hear from you in 2015!
Stay Informed and Educated — Subscribe to the SFP Blog! Use the quick and easy form to the right of this article.
