After the holidays, many of us are in New Year’s Resolution mode, vowing to lose weight, organize our homes, kick our bad habits, and become more financially responsible. The thing about New Year’s Resolutions, though, is that they’re impossible to achieve without a plan.
If one of your resolutions is to lose 30 pounds, the weight isn’t going to magically fall off. (Though wouldn’t it be great if it did?) You need a plan outlining how you’re going to accomplish this and – this is important! – you must follow that plan consistently to achieve your goal. Your weight loss plan would likely include working out a minimum of 3x/week, reducing calories, walking 10,000 steps/day, etc. If you’re disciplined and consistent, you’ll see results.
The same is true if you want to improve your financial health. It doesn’t just magically happen – it requires a thoughtful, strategic plan, combined with the discipline to follow the required actions.
As financial professionals, the Guyton-Forge team strongly recommends developing a solid financial plan that takes a “big picture” view of your financial goals and includes actionable steps to achieve them. To accomplish this:
Determine your financial goals. Do you want to buy a house? Build an emergency fund? Pay off your student loans? Save for retirement? When you identify what matters most to you – and keep your goals and priorities in mind – it makes saving feel more intentional. Create distinct timeframes. For instance, your short-term goals (six months to five years) could include paying down debt and building an emergency fund. Mid-term financial goals (five to 10 years) could be buying a house, which requires planning and saving. Long-term goals (10+ years) could include paying for your kids’ college tuition and saving for retirement.
Assess your current financial situation. Review your current assets – like savings, investments, etc. – and outstanding debts, including your mortgage, student loans, car payments, etc. Also consider the income from your job, and any additional sources of income, like rental properties.
Track your money. Creating a cash flow document helps you accurately determine your monthly cash flow – what’s coming in and going out. This is often an eye-opening exercise, and can help illustrate how much you’re spending on things like “impulse purchases” (hello, late-night Amazon orders!) and unnecessary indulgences (like the expensive gym that you pay for, yet never visit).
Develop a budget. Work with your financial professional to create a realistic budget, earmarking how much money to allot for your financial “needs” (e.g., mortgage, groceries, insurance, etc.), “wants” (e.g., dining out, entertainment, gifts, travel), and savings. And switch your mindset around budgeting. Instead of thinking of it as a “punitive” exercise that restricts your spending, view it as a great way to reach your financial goals.
Create an emergency fund. Be intentional in saving money for unexpected emergencies – a health event, a major home repair, etc. – so one broken furnace or root canal doesn’t financially derail you. Ideally, save the equivalent of 4-6 months’ salary for this purpose. If that feels overwhelming, start small. Even saving $100/month adds up. Consider opening a separate savings account for your emergency fund, so the money is accessible, but you won’t be tempted to spend it impulsively.
Create a roadmap. Just as you wouldn’t build a house without a blueprint, develop a roadmap that outlining the steps you’ll take to achieve your financial goals. Then you can take actions – and make financial decisions – that align with your specific goals, priorities, timeline, circumstances, and risk tolerance.
Consider any major life events. Weddings, births, deaths, job loss, retirement, career changes, relocations, and other big life events can all impact your spending, budget, and financial plan. Whenever you have a major life change, discuss it with your financial advisor, who can help you revise your financial plan (and goals) accordingly.
Plan for retirement. It’s never too early to start preparing for retirement – even if you’re decades away from this milestone. Remember – the longer you save for retirement, the better, as it gives your savings more time to grow. Sign up for any employer-sponsored retirement plan, such as a 401K. If your employer matches employee contributions, contribute the maximum amount that they’ll match – and watch your savings grow.
Diversify your investments. Investing might feel intimidating at first – especially with media headlines spotlighting the volatile market – but your financial advisor can guide you, considering your current financial circumstances, goals, and risk-tolerance. We recommend diversifying your portfolio and not putting all of your financial eggs in one basket. Also, we urge our clients to play the “long game” so investments will, ideally, grow over time, regardless of what’s happening in the market on any given day.
Include estate planning in your financial plan. Financial planning also means considering your family’s future needs. Create a will to ensure that your assets are distributed per your wishes. Other types of critical estate-planning documents can provide your relatives with directions (like your living will), as well as directions about who should manage your affairs if you become unable to do so.
Review and adjust your plan regularly. Creating a financial plan isn’t just a one-time effort. Since your circumstances (and priorities) will likely evolve throughout your lifetime (e.g., getting married, having children, losing a partner to death or divorce, changing jobs, inheriting money, etc.), review and adjust your financial plan regularly – at least annually – and after any major life event. You may need to rebalance your portfolio due to market shifts and life changes, and your financial professional can help guide this effort.
Work with a financial professional. Find an experienced professional who provides a comprehensive, integrated, big-picture approach, considering estate planning, retirement income planning, business exit planning, etc. The right advisor can help you develop your personalized financial plan to help you maximize your financial successes.
Ready to make or revise your financial plan? Let’s talk. The award-winning Guyton Forge team is here to help you achieve – and exceed! – your financial goals. The Guyton Forge team has won numerous awards for their exemplary service and knowledge. Most recently, Joseph Guyton, Owner The Guyton Group, earned the prestigious designation of Five Star Wealth Manager* for the seventh time. To earn the Five Star Wealth Manager award, wealth managers must demonstrate that they provide the highest-quality services to their clients. Additionally, Joe and his son Andrew Guyton, Founder of Forge Financial, have each (repeatedly!) earned the prominent designation of President’s Council Qualifier, a Guardian award for financial professionals who provide exceptional customer service and nurture long-term client relationships.
At Guyton-Forge, we offer the experience of a big firm with a small-town feel. We customize our approach (and our advice) to meet each client’s specific situation, needs, and goals. We’re proud to do things differently – it’s part of what sets us apart as a friendly, high touch practice. We offer extensive experience and knowledge, creating strong, long-term relationships with our clients.
Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 160 GOULD STREET, SUITE 310, NEEDHAM MA, 02494, 781-4494402. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. Guyton-Forge is not an affiliate or subsidiary of PAS or Guardian. Life insurance offered through The Bulfinch Group Insurance Agency, LLC, an affiliate of The Bulfinch Group, LLC. The Bulfinch Group, LLC is not licensed to sell insurance. CA Insurance License Number – 0A96200. Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. 7383196.3 Exp 1/27
* This award is not issued or endorsed by Guardian or its subsidiaries. The annual Five Star Manager award is based on criteria developed and obtained by Five Star Professional. No compensation has been provided by the adviser in connection with obtaining or using the third-party award.