The holidays and vacations are over, the kids are back to school and we are all set to start our New Year resolutions.  If building wealth or maintaining financial security is on your list of resolutions, here are nine questions you can ask yourself to make sure you are prepared.

1. Have I written down or listed my financial goals (short & long term)?
2. Have I reviewed my current insurance policies (life, auto, homeowners, health, etc.) as recommended every 1-3 years to make sure they are still aligned with my needs?
3. If something unexpected happened to my income (loss of job, slow-down in economy, disability, medical) how long would I be able to maintain my lifestyle for?
4. Am I contributing to my retirement accounts and reviewing the investments regularly?
5. Should I utilize other investment or savings vehicles, understanding how each one is used to ensure I reach all my financial goals?
6. Am I comfortable with the amount of debt I hold and have a plan to pay it off?
7. I would like to gift assets to my children, grandchildren or charity so do I need a plan in place?
8. Have I created a solid estate plan that includes everything from wills, trusts and power of attorney that will ensure my families continued financial stability and safety?
9. Will my family and loved ones know how to access all the finances (logins, PW) and will they be able to manage them if I cannot?

1.Writing down or listing goals.

Describing your goals in written form is strongly associated with goal success. By writing down your goals you are able to store the information in a location that is very easy to access and review at any time. You could post small tasks or list of short-term goals in your office, on your refrigerator, etc. It’s easier to keep on top of something if you’re frequently staring at a visual cue.

2. Reviewing you current Insurance policies.

Things in your life may not change every single year, but It is impossible to imagine that nothing in your life stays the same for long. This is why it is important to review your various types of insurance. As you experience change, whether it be a new car, a home renovation, getting married, having a child, getting divorced, or having a child graduating from college. It is important to make sure your insurance policies reflect these changes and current needs. Perhaps you will have a need for a new type of insurance, increase or decrease the amount of insurance coverage already in place, change beneficiaries, owners or insured people on your policies. Another good reason to review your policies is to keep up with the changes and updates in the ever-changing world of insurance. Companies are constantly adding new features, technology, discounts and other ways to reduce the cost of insurance.

3. Having an Emergency Fund.

We never want the unexpected to happen and not all of us are prepared for it. Many of us may have retirement savings or other investments that may not be very liquid. What is in place if a large unexpected cost arises or you lose your job or saw a reduction in your income for a short period of time? Having very liquid short-term investments or cash savings in the bank that could cover 3-6 months of your basic monthly expenses could become a life saver. Using credit cards, loans or retirement funds to cover living income could end up costing you thousands more between taxes, fees and penalties.

4. Contributing to a retirement plan.

Even if it is a small percentage to start with, contributing to a retirement plan adds up over time. Many employers will provide a matching contribution as long as you contribute. That is money you are leaving on the table if you are not contributing. If you are a contractor, sole proprietor, or employee of a company that does not offer a retirement plan, there are several other retirement vehicles that you can use. Even if you are a stay at home spouse and have no personal earned income, you can set up a spousal IRA under your name and contribute a portion of household income into your own retirement account.

5. Understanding the investment vehicle, investments inside the vehicle, and the risk.

There are many investment vehicles to utilize and it is important you know the goals set for each vehicle. For example: 401k (tax-deferred long-term retirement), Roth IRA (tax-free growth for retirement + more), Savings account (short-term safety) – the list of vehicles is extensive but does not compare to the amount of investments choices you can choose from inside each of these vehicles. In certain vehicles like in a 401k there may be a limited selection of equity funds or bond funds.  These days I have seen 401k’s open up their plans to allow investors access to almost any investment available in the market, which means you have access to thousands of different investment choices. So, it is important to make sure these investments are aligned with the amount of risk you are willing to accept.

6. Being comfortable with debt.

Debt is not necessarily a bad thing and most everyone I know utilizes debt, whether it be a mortgage, car loan, credit card, student or business loan, etc. Most of the time we are utilizing debt to improve our lives. We need that car in order to get back and forth to work, to go to school to get a better paying job or invest in a business or property. Without borrowing funds most of the things we accomplish in life may not have ever happened. It is when we over leverage ourselves or try to buy things we don’t necessarily need or can’t afford with credit when we find ourselves trying to dig our way out of a financial hole. Of course, sometimes unfortunate things happen in life and there is little we could have done to plan for it. But setting budgets, and tracking expenses can help you create a plan to manage or paydown your debt. Not to mention a good habit to adopt in making sure you reach your other financial goals.

7. The ability to gift.

It can give us great joy to pass along some of our good fortune to others. It is also nice to be able to see the beneficiary actually benefit from the gift.  However, sometimes giving an outright gift may not always be the best idea. There are several ways you can set up gifts whether it be to your kids, grandchildren or charity. Perhaps you want to help your grandchildren pay for college but want to make sure they attend college to receive the gift, what is the best way to do that? Maybe you have plans to give some of your estate to a charity or university when you pass but would like to start to give some now while you are living. What is the best way to do that? Maybe you want to gift some property or assets to your kids, but one of your children is not financially responsible and you are uncomfortable handing over the assets or property. What is the best way to handle this? Figuring out all your options can help in making sure your gift is being used the way you intended. 

8. Having an estate plan in place.

I may be repeating myself here, but if you experience change, you should be reviewing or updating your estate plan. You may be saying to yourself, “I don’t really have an estate, so why do I need a plan?” In some case’s there may not be a need to go as far as setting up a family trust. However, everyone should have medical directives and a power of attorney signed and notarized in the case that something happens to you and someone on your behalf needs to either make medical decisions for you or handle your finances in the event you cannot.

And even though I just said in some cases there may not be a need for a family trust, it makes a lot of sense to have one.  Sure, you can get away with just having a will and making sure most of your assets have a beneficiary assigned to them or are titled jointly with the person you would like to receive those assets, but there is a good chance your financial situation is much more complicated. Having a trust in place can not only help you avoid the costly and lengthy process of probate, it supersedes the courts and keeps your affairs private where as anyone can find out about your estate and contest your wishes through the probate process.

9.Letting someone know where to find everything.
You would almost think I wouldn’t need to mention this step, though you would be shocked to hear all the stories of trying to locate important documents and or sifting through financial records for days in order to locate accounts to make sure bills will continue to be paid. It is a good idea to show your spouse and anyone else that may have a hand in helping with your finances where and how they can access all your financial records and the names and numbers to any trusted advisors along with any other estate or trust documents. These days, most of the documents have gone electronic, so making sure they have online access with codes will save a lot of time.