Starting off the New Year Strong: 4 Tips to Improve your Finances in 2016

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Starting off the New Year strong is essential for improving your finances in 2016. Here are 4 tips for how to get started.

1. Get on the same financial page as your partner.​

Coordinating spending and saving habits in a joint bank account with your partner is important, especially if one of you tends to overspend. It’s important to live within your means, which might mean letting go of spending carelessly or simply trying to keep up with your peers. Take time to review the previous year’s spending to identify any big leaks, such as splurging on name-brand products and going out to dinner frequently. Spend smarter, by planning for expected but infrequent costs, including gifts or travel, as well as all routine monthly expenses.

2. Maximize your workplace benefits.

Take a close look at available retirement accounts (making sure to pick up any matching benefits), flexible spending accounts, financial literacy programs and wellness support, which can include free counseling. Health insurance and disability insurance can also help protect your finances in the long term. Utilize health savings accounts to take advantage of tax breaks to help lower your cost of paying for health related expenses, such as doctor’s visits and medications. If you have access to a 401(k) through work, make sure you set up to automatically deduct a certain percentage from your paycheck. Or find out if you are eligibility to open an IRA.

3. Finalize your estate planning documents. ​

Ensuring that you have a will and living trust, advance directive for health care and power of attorney for finances can all help make it easier for family members to help you manage your money as you age. If you become incapacitated, for example, you’ll want it to be as easy as possible for someone to step in and help you manage your money.

4. Rebalance your investments regularly. ​

It’s important to make sure your money will last. If you invest too conservatively, then your money might not keep up with inflation. Meanwhile, if you are overly aggressive, swings in the market could lead to a loss of assets at an inopportune time, like just before retirement. Check that your investments are in a portfolio that’s aggressive enough to outpace inflation and review your portfolio at least once a year to make sure you have the right mix for you. Working with a financial advisor can help you determine if you are on the right track, so you don’t run out of money in retirement.

If you have any questions, concerns, or would appreciate a second opinion, please don’t hesitate to contact us. We work closely with our clients to help them achieve their retirement goals. Whether it’s one month or 20 years away, it’s never too late or too early to start planning for your retirement career. Szarka Financial advisors offer initial no cost financial reviews to help make sure you’re on track. Schedule your review today!