It’s no coincidence that January, the month for New Year’s resolutions, is designated “Financial Wellness Month.” Then again, there’s really no better time to assess your financial health. So, take stock of your current finances and see how they align with your short-term —and long-term— goals. Okay, you can do this.
So, where do you start?
Most likely, you’re already familiar with the first step—create or update your budget. Luckily, today’s personal finance apps and software make tracking your income and expenses easier than ever.
Your goal here is twofold. You want to see where your money goes and to make sure you’re spending it on what matters to you. Needs and priorities can change from year to year. Your budget should change with them. So as you look at the numbers, think about the financial decisions you might face in 2017. From home improvements to retirement savings to charitable donations, your budget will shape your year.
Save. Save. Save.
Maximizing you retirement savings is one of your most important financial decisions. If you’re not saving for retirement, begin now—and save as much as possible. If you’re already saving, consider increasing your contribution levels. With an employer-sponsored plan, you should contribute at least enough to get the maximum employer match. Once you reach age 50 or older, catch-up contributions could allow you to save even more.
Talk it out.
Just like going to the doctor, routine fiscal checkups can help ensure your financial health. Most experts recommend you meet with your financial advisor at least once a year to review your situation—and more often to adjust for major life events, such as marriage, separation, divorce, or birth or adoption of a child. As your partner, your advisor works with you not only to develop your financial plan but also to help you and the plan stay on track.
Get to know your credit.
Experts recommend checking your credit report periodically to verify the information is accurate and to help guard against identity theft. It’s quite easy since you’re entitled to one free credit report per year from each of the three credit reporting agencies: Equifax, Experian, and TransUnion.
These reports do not include your credit score, but they do provide a detailed credit history. If you find mistakes, you have the right to dispute them free of charge—and can file a report online. If you spot fraudulent activity, contact all three reporting agencies immediately. If you are interested in learning your credit score, your credit card company probably offers a free version you can check whenever you want. Basically, by sorting out your credit you can focus on building your broader financial plan.
Consider how you make charitable donations.
The way you give can make a difference for your favorite causes and your tax situation. One of the most strategic ways to meet your charitable goals is to use a donor-advised fund like the TIAA Charitable Giving Fund.
It works like a personal fund dedicated to your charitable giving. Once you open a Giving Fund, you can contribute to it as often as you like. All contributions may be eligible for a charitable tax deduction in the year contributed. You can use the Giving Fund to support charities whenever you want, meaning you’ll be able to better plan and organize giving throughout the year. While you’re deciding, the money in your donor-advised fund is invested and has the potential to grow, tax-free.
In other words, as your Giving Fund grows through potential appreciation and various contribution strategies (e.g., cash, securities), so could your charitable impact. Down the road, that could result in a more substantial gift to your favorite charities. Now that’s giving strategically.
In the end, all it takes is some easy, but meaningful, financial planning to get your 2017 off on the right foot. So, let’s get going.