Fall officially begins on September 23. It may not feel very Fall-like in Southern California at the moment, but soon the air will turn cooler, the leaves will begin to fall and the days will grow shorter. We will fill our free moments with favorite Fall activities, like sipping pumpkin lattes as we carve spooky or silly faces into pumpkins with our kids. It’s one of my favorite times of the year and I can’t wait to do all of those things. But before you get too caught up in Fall fun, I encourage you to take a few minutes and make some smart financial moves before year-end.
Most people tend to relax a bit in the summer and gear-up again in the Fall. This is the perfect time to make sure you end the year financially strong.
It’s important to regularly review both long-term and short-term goals (and everything in-between) to monitor your progress because goal achievement doesn’t happen because you set goals or wish for them to come true. You should at least review all goals quarterly, while some goals, such as debt elimination or vacation savings, may require more frequent check-ups to stay on target.
Now let’s get Financially Real: Not all goals are created equal. Some matter more than others. Review the ones that matter most, first. I find that people often work on the goals that matter the least because they are easier to achieve, which may be a good tactic if you are new to goal-setting and need to experience a win to help you tackle the harder and more valued goals. However, I also find most people continue to cherry pick the easier and lower-valued goals over higher priority goals, but remember — those high-value goals bring the greatest satisfaction and take you another step closer to realizing your ideal life.
To Do: Review every goal individually, starting with the highest-value goal. Outline any action steps you need to take before your next check-in and set benchmarks for your next review.
Unless you live under a rock, you may recall the recent (and continued) market volatility we are currently experiencing. Market volatility is a natural, normal occurrence, but we still tend to react emotionally when we experience it, which can aggravate and worsen the situation. We see portfolio balances drop and our default reaction is often panic, which is further fueled by the media. It is scary and nerve-wracking, but there is also opportunity to mine too. Stay emotionally competent so you can make goal-based and informed decisions, rather than emotional ones you may regret later.
To Do: You’ve reviewed your goals, so now make sure your investment strategy remains in alignment with your goals. Goals can and do change, which means your investment strategy may need to be adjusted as well. Talk to your financial advisor and see if the current market volatility is creating opportunities you should consider and offers any tax advantages to minimize your 2015 tax bill.
There is a lot of angst around insurance as people don’t like thinking about their own mortality. I’ve been a Certified Financial Planner for 23 years and I can tell you from firsthand experience the difference insurance makes in the lives of those who have the protection when needed and those who don’t. People will insure things of high-value without argument, except for themselves, which has never made much sense to me. You — and your ability to earn a living — is what pays for all those valuable things you happily insure and more importantly — the life you’ve created for yourself and your family. Value yourself (and your loved ones) first.
To Do: Review your insurance coverage, making sure it is up-to-date (i.e. beneficiary forms) and you have adequate coverage. As your earnings grow and you have children, you may need increase your coverage to adjust to the changes in your life. Also, don’t forget about disability and long-term care insurance needs either. If you opt to forgo DI and LTC coverage, what is your plan if a need arises? And statistically, there is a high probability it will.
I know we’re just entering Fall but the busy and expensive holiday season will be here before you know it. Hopefully, you’ve been saving money throughout the year for the holidays, but if you haven’t, you still have a few months to start saving and also earn a little extra money too.
A few options to help you earn some extra money before the holidays:
To Do: Review or create your holiday budget now to avoid creating debt later. Consider earning some extra money to help offset expenses or to go towards other goals.
Most of us are aware of the need to take care of the above moves and do so to differing degrees. The first three, in particular, create a big chunk of our financial lives. But they don’t create all of it. There are lots of little things, like credit scores, beneficiary forms, Wills, etc., that connect to them and create our whole financial life. Let’s also make sure they are in tip-top shape too.
It’s somewhat sobering to realize how soon 2015 will come to close. But the next few months will zip on by and soon we will be counting down to the start of 2016. By completing these five smart financial moves this Fall, you will put yourself in a position to end the year strong and also start 2016 in a great place financially.
What financial moves do you plan to make this Fall?