The new year is here, and the desire to get our finances in order comes with it.
Like most people, you probably have a few financial resolutions in mind. But before working on them, you must ensure your finances are in good shape. That’s where this checklist comes in! This blog post will cover everything you need to prepare your finances for 2023.
1. Review your income and expenses
The first step in any financial planning process is closely examining your income and expenses. This will give you a good idea of where your money is going and where you can cut back if necessary. There are a few different ways to do this:
– Look over your past year’s bank and credit card statements to understand your spending patterns.
– Use a budgeting app or spreadsheet to track your income and expenses.
– Meet with your financial planner to get an objective view of your finances.
2. Build up your emergency fund
An emergency fund is an essential part of any financial plan. It’s there to help you cover unexpected expenses, like a job loss or medical bills. Ideally, your emergency fund should have enough money to cover 3-6 months of living expenses. If you don’t have an emergency fund, now is the time to start one.
3. Optimize your retirement savings.
Consider maxing out your traditional IRA or Roth IRA or making your 401k contribution up to the matching limit.
4. Review your insurance coverage
Make sure you have the right amount of insurance coverage for your needs. This includes health, life, auto, long-term care and umbrella insurance. Umbrella insurance is vital as it protects your assets beyond existing limits and coverage of other policies.
5. Update your estate plan
If you don’t have trust, now is the time to create one. Estate planning for high-net-worth advanced planning should be discussed.
6. Optimize your un-realized losses in your Non-IRA
Tax loss harvesting should be considered as it allows you to sell investments when they’re down and offset them with realized investment gains.
Doing some year-end financial planning will put you in a good position for the coming year. By following this checklist, you can ensure your finances are in good shape, and you’re on track in pursuit of your goals.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.