The 10-Step Plan to Keeping Your 2016 Financial Resolutions

December 15, 2015

Connect Member

Founder & CEO of WIN: A platform for smart, busy women to create & execute a financial life plan

As we come to the close of 2015, most of us are already thinking about our goals and desires for the year ahead. The best way to achieve a goal is to put a plan in place. If you keep just one New Year’s resolution, make it a promise to put your hard earned money to work to achieve your financial goals.   

Financial security now and in the future is a goal shared by everyone. Mainstream media has already made the world aware of the shortfalls in social security, pensions, and retirement savings. In light of this, you’re probably thinking about taking action to protect your financial future, but you don’t know where to start. Really, there are just two key hurdles to overcome: The endless flow of irrelevant and oft-times incorrect information, and your fear of making the wrong decision.

This simple 10-step action plan will get you started and feeling good about achieving your financial goals in 2016 — so you can actually keep this resolution, even if the others don't go so well.

1. Gift yourself: For every dollar you spent on a gift for someone else this holiday season, put a dollar into an envelope marked “me.” At the end of the holiday season, use this money to first set up an emergency fund, and then start investing.

2. Gather: Put all financial and legal documents in a file or box — don’t read them, analyze them, or fret over them. Gather one statement for each bank and brokerage account, insurance policy, student or other loan agreement, mortgage, credit card, will, trust, and digital account. Note the username and password for each online account and keep it safe.

3. Create an emergency fund: Open a separate savings account and deposit three months of required expenses into it for emergencies. Do not use this account to pay bills, take a vacation, or make spontaneous purchases, and do not invest the funds. This account should remain liquid to pay living expenses in case of a job loss or other emergency.

4. Invest: Take the balance of that “gift envelope” you created, as well as any year-end bonus and monetary gifts, and start investing. Select low-cost diversified funds. A trusted financial advisor will help you choose investments to achieve your financial goals.

5. Find money: Many women think they do not have enough money to start investing. This is a falsity — the smallest amount of money invested early has great opportunity for growth. One less cocktail or latte quickly adds up to invest for the future with little impact on the quality of your current life.

6. Identify and fund investing goals: Identify your goals — perhaps you want to seed a business, fund a child’s college education, or retire abroad — and then allocate your investments to achieve each goal.

7. Automate saving and investing: Set up automatic contributions to your savings and investment accounts so you don’t have to remember to deal with it each month.  

8. Create a digital estate plan: Identify accounts, usernames and passwords, and the person you want to be responsible in the event of your death. Store the information in a safe place.

9. Create an estate plan: Rich or poor, you need a plan. A plan defines how your assets are divided, as well as who cares for your children and makes your medical decisions, in the event of your death or incapacity. If you do not put a plan in place, the law and courts will decide for you.

10. Find a Financial Partner: Your financial needs and goals will change as you transition through your life. Find a wealth advisor you can partner with so your plan is always one step ahead of where you want to go.

Stacy Marcus is a member of the DailyWorth Connect program. Read more about the program here.