Ringing in a new year is always exciting, and the promise of everything that 2023 has in store is worth celebrating. Want to set yourself off on the right financial foot when the clock strikes midnight? Here, we share some financial planning tips to help you jump-start your financial plan for 2023.
1. Set Financial Goals
The first way to jump-start your financial plan is to set financial goals. Do you have a goal for your finances or are you just crossing your fingers and hoping you have enough for the lifestyle you want?
Specific goals with defined timelines will help to determine the best course of action, including how much risk you can and should take with your money.
For instance, if you’re looking for a guaranteed source of income, then you will probably want to stick with investments that will provide long-term security. Conversely, if you are looking for substantial growth, then you might want to take on more risk and invest less conservatively. Every dollar in your portfolio should be working toward a specific goal.
Remember that the best goals will be SMART:
- Specific: The more you can identify exactly what you’re saving for, the easier it will be to work toward it.
- Measurable: As much as possible, try to identify how much your financial goal will cost. Do the research to figure out what you need to save so that you’re able to see tangible progress along the way.
- Attainable: Make sure your goal is realistic and achievable. This might require some self-reflection or reevaluation of your priorities.
- Relevant: Ask yourself which goals align with your core values. Remember that your finite assets will be split amongst your seemingly infinite list of wants. The more you can scale back your list to what is truly relevant, the quicker you’ll be able to achieve each goal.
- Timely: Identify the timeline for each goal so that you can prioritize which ones need to be addressed first and how much risk you can afford to take.
2. Build Up Your Savings
If there’s one thing the last several years have taught us, it’s that it’s crucial to prepare for the unpredictable. Whether it be a pandemic, a lost job, or rising rates of inflation, sufficient savings can mean the difference between staying afloat during uncertain times and not having enough when you need it most.
If you’re not saving already, take steps to start putting a portion of your income away every month. Usually, 10-15% of pre-tax income is a good guideline. Ideally, it is recommended that most people should have at least 3-6 months’ worth of non-discretionary expenses saved in a highly liquid, easily accessible emergency fund before saving toward other goals. If you have variable income, or your household only has one source of income, then saving up to 12 months of expenses can help safeguard your finances during times of uncertainty.
No matter how much you put away, consistent savings are the cornerstone of any solid financial plan.
3. Reevaluate the Risk in Your Portfolio
As mentioned in step one, risk is fundamental to investing. Even “investing” by hiding cash under your mattress involves risk, since there’s always the chance of a break-in or increased inflation eating away at its value. To jump-start your financial plan in 2023, be sure to reevaluate the amount of risk you are taking in your overall portfolio.
It’s not uncommon for a portfolio to become unbalanced as the market ebbs and flows. What may have started out as a 60/40 allocation between stocks and bonds can easily become a 70/30 or 80/20 allocation, which is a significant difference in risk level. You may also find that you are too heavily concentrated in one type of asset or in one company’s stock. If this is the case for you, rebalancing and diversification should be explored.
Though risk is fundamental to investing, it’s also crucial that you aren’t overexposed to unnecessary risks. Take steps to evaluate your risk tolerance, based on your unique financial circumstances, stage of life, and personality, and be sure your investments align.
4. Partner With a Financial Professional
Regardless of where you are in the planning process or what goals you have set for your financial life, we are here to support you, guide you, and navigate any financial challenges you may face. Partnering with a financial professional is a great way to take control of your finances and jump-start the new year. At Premier Planning Group, we have the tools and expertise to help you set financial goals, plan for retirement, and reevaluate your risk level. If you’re ready to start planning for the new year, call our office at (443) 837-2520 or email Brion’s executive assistant, Talia Grover, at taliagrover@premierplanninggroup.com to set up a complimentary consultation.
About Brion
Brion Harris is the CEO, founder, and managing partner of Premier Planning Group, an independent financial firm specializing in working with pre-retirees and retirees, helping them create customized wealth preservation and retirement distribution strategies. With over 20 years of experience, Brion has developed deep knowledge and skill in helping his clients simplify their finances and find confidence in their financial future. Brion and the Premier Planning team are known for their unparalleled client service and their dedication to building long-lasting relationships with their clients. As a result, Brion has been the recipient of the #1 Advisor Leadership Award* at Summit Brokerage Services for eight years running and has a reputation as one of the top retirement advisors in the business.
Brion is a proud 20-year resident of the Annapolis community, where he resides with his wife, Elizabeth, their three children, Addison, Jay, and Scarlett, and their two dogs, Pepper and Coco. When he’s not working, you can find him boating, skiing, traveling, and enjoying good food and music with his family. If you want to learn more about Brion, connect with him on LinkedIn.
*The #1 Advisor and Leadership Award is based on production data while at Summit Brokerage Services, Inc. Brion Harris received the award in 2014, 2015, 2016, 2017, 2018, 2019, 2020 and 2021. This award is not a guarantee of future investment success. This recognition should not be construed as an endorsement of the advisor by any client.