5 ways to stay on track financially this year

This column was published in the Knoxville News Sentinel on Sunday, Jan. 20, 2019.

A new year allows us to start fresh and think about new things – new resolutions, new habits, new goals and new opportunities for growth. Last year wasn’t particularly kind to investors.

Equity markets across the globe ended lower, and volatility picked up during the fourth quarter. Investors experienced the worst-ever Christmas Eve decline, which was followed by the biggest one-day point gain on record. Amid choppy markets and rising volatility, many people are wondering what to do.

No one has a crystal ball, but the answer is quite simple: Take care of the things you can control, and don’t worry about the rest.

Here are five things you can do now to stay on track financially.

1. Even though 20 percent of Americans would rather spend an hour in jail than build a five-year financial plan according to the New York Post, spending the time now to create a plan for 2019 will set you up for success later. January is the perfect time to set financial goals and track them throughout the year.
2. January also is a good time to consult with your financial advisor and make sure your investment portfolio is aligned with your risk tolerance and financial goals. Review your cash needs for the year, and make sure you are still on track with your retirement savings. Now that we have had a significant market pull back, it is easier to handle if you aren’t being forced to sell when the market is down. Savings for those home renovations we are going to be making soon never should have been invested in volatile investments.
3. Review your insurance policies and make sure you still have the right amount of coverage. Certain life events may need additional coverage: Did you buy a house or increase any personal property? New parents might want to consider life insurance for the first time. Some changes also allow you to decrease the amount of coverage. Talk to an advisor to make sure you have the policies in place for your needs. And if you have divorced, have you changed your benefiary forms? Some forms are “automatically” changed when a divorce occurs. Other beneficiary  forms remain in force. Make sure that you are taking control over these decisions, not the form itself!
4. Review your saving and spending plan for education. There are several ways to pay for higher education, as well as expenses associated with K-12. Tailor the plan to your family’s needs and consider retirement goals and savings. Each state treats educational savings accounts differently, but there are tax-advantage vehicles for saving for college. It’s worth spending the time to ensure you use the best type of account for your goals.
5. If you have not fully considered estate planning, add it to your to-do list for 2019. Estate planning encompasses how your assets are distributed after your death, as well as other important legal directives. Review the beneficiaries on all your accounts and make sure they are up-to-date. Given the important tax and legal consequences, seeking help from an estate planning expert often is the best decision.

Your financial well-being is interconnected by investments, savings, insurance and estate planning. It’s important to consider how all the pieces fit together for your peace of mind. While you can’t control the zigs and zags of the market, you can proactively take control of your short- and long-term financial plans. It will be the best New Year’s resolution you can keep.