Financial New Year’s Resolutions: A Fresh Start for Your Finances

The new year is here, bringing a fresh opportunity to take charge of your financial well-being. January is an ideal time to reassess your financial plans, ensuring they align with your current life circumstances and goals. Life changes happen constantly—new family members arrive, properties are bought or sold, and priorities change. Starting the year with a financial check-up can help provide clarity and peace of mind.

Here are some key areas to review as part of your financial New Year’s resolutions:

1. Update Your Estate Plan

Your estate plan is not a static document—it should evolve alongside your life. Whether it’s a will, a trust, or a combination of the two, these documents dictate how your assets will be distributed. You also want documents outlining who will make important decisions if you cannot do so. Consider:

• Life Changes: Have you recently welcomed a child or grandchild? Experienced a divorce? Lost a loved one? These events might require updates to your beneficiaries or decision-makers.

• New Assets: If you’ve purchased property, invested in new accounts, or started a business, make sure these assets are accounted for in your estate plan.

• Healthcare Directives: Review your advance directives to confirm they reflect your wishes and designate the right person to act on your behalf. Set up healthcare and financial powers of attorney if you haven’t already done so.

2. Reassess Beneficiary Designations

Beneficiary designations on retirement accounts, life insurance policies, and investment accounts often override what’s in your will. This makes keeping them current essential. Ask yourself:

• Are your primary and contingent beneficiaries correct?

• Have any of your beneficiaries experienced life changes, like marriage, divorce, or having children?

• Are there any individuals or charities you’d like to add?

3. Review Your Insurance Coverage

Insurance can be a safety net, but as your life evolves, so do your coverage needs. Take a close look at:

• Life Insurance: Do your current policies provide enough support for your loved ones? If your family has grown or your financial obligations have changed, your policy may need reassessing.

• Homeowners or Renters Insurance: Have you made improvements to your home or acquired valuable items? Make sure your policy reflects these changes.

• Disability Insurance: Protecting your income is important. If you don’t have disability insurance, it’s worth exploring.

• Long-Term Care Insurance: Make sure you have a plan for long-term care needs as you age, and consider whether that plan includes insurance.

4. Add Trusted Contacts to Your Financial Accounts

A trusted contact is someone your financial institutions can reach out to if they suspect fraud or are unable to contact you. Adding trusted contacts to your accounts doesn’t grant them control, but it can add an extra layer of protection. Consider selecting someone who understands your financial situation and whom you trust completely. Also, talk to your financial advisor about a trusted contact for the work they do with you.

5. Re-evaluate Your Financial Goals

The new year is a great time to step back and assess your financial goals. Are you saving for a home, retirement, or a child’s education? Do you want to travel more, donate to charity, or work toward increased financial independence? Ensure your budget and investments align with these objectives.

Here are a few questions to guide your goal setting:

• Am I on track to meet my retirement savings targets?

• Have my priorities shifted in the past year?

• Are there opportunities to reduce debt or increase savings?

6. Consolidate and Simplify

If you have multiple accounts scattered across various banks or investment firms, consolidating them can make managing your finances easier. This can also help reduce fees and streamline your estate plan. However, make sure to weigh the pros and cons, particularly regarding account features and tax implications.

7. Partner with a Fiduciary, Fee-Only Financial Advisor

Navigating these tasks can feel overwhelming, but you don’t have to do it alone. A fiduciary, fee-only financial advisor can provide personalized guidance tailored to your situation. Fiduciary advisors are legally obligated to act in your best interest. Fee-only means they’re compensated solely by you, not by commissions or third parties. This approach helps minimize conflicts of interest and keeps the focus on your goals.

Make This Year Count

Financial New Year’s resolutions aren’t just about improving your finances; they’re about building a life that reflects your values and dreams. Taking small, intentional steps can help create a strong foundation for yourself and your loved ones.

As you tackle these resolutions, remember that life is unpredictable. What matters is having a plan that adapts as your circumstances change. With diligence and, if needed, professional guidance, you can start the year off strong and set the stage for financial wellness in the years to come.

Schedule a complimentary, 15-minute chat with a fee-only, fiduciary financial advisor today to discuss your personal situation.

This material was written in collaboration with artificial intelligence (ChatGPT) derived from sources believed to be accurate. This information should not be construed as investment, tax, or legal advice.

Parkshore Wealth Management is a family-owned, independent, fee-only Registered Investment Advisor with offices in Granite Bay and Folsom, CA, and Lehi and Logan, UT. We partner with financially responsible individuals and families who are eager to take positive steps that will allow them to use their money to build the life they desire. The firm is led by Harold Anderson, CFP®, and Daniel Andersen, CFP®, both members of NAPFA, the country’s leading professional association of fee-only financial advisors.