Time to Revisit Your Annual Financial Goals

Time to Revisit Your Annual Financial Goals

September 30, 2016

Before the busy holiday season arrives, I recommend taking some time to reexamine your finances. Here are five steps you can take to improve your financial picture before year-end.

1. Give Yourself a Financial Checkup. For a quick assessment of your financial progress, review your net worth. You can calculate your net worth by adding up the value of your assets (investments, retirement savings, cash, home, autos, etc.) and subtracting your liabilities (mortgage, student loans, credit card debt, etc.). If your net worth is increasing annually, then you are on the right path. If not, then it may be time to make some adjustments.

2. Revisit Your Workplace Retirement Savings Plan. Most employers offer “open enrollment” during the fall, which is often the only time of year you can make changes to the amount you contribute to your 401(k) plan each pay period. Do you need to increase your contributions in order to maximize your savings and reduce your taxable income? Now is also a good time to review your retirement plan’s asset allocation and investments and make any changes necessary to ensure they align with your retirement goals and risk tolerance.

3. Review Your Tax Withholding. If you’re someone who either receives a large tax refund or writes a big check to the IRS every April, then you may want to adjust your tax-withholding rate. Fine-tuning your tax-withholding rate can help you avoid giving the government a tax-free loan each year. Or, if you usually owe a large amount to the IRS each year, increasing your tax withholding can make tax-filing season less stressful on your checkbook.

4. Participate in Annual Benefits Enrollment. In addition to making changes to your workplace retirement savings plan, fall is open enrollment season for company-provided benefits. This is the time of year when you can make changes to your healthcare benefits, employer-provided life insurance and disability coverage, as well as flexible spending accounts. If you plan to make changes, don’t procrastinate. Because once open enrollment ends, you will be locked into your choices for all of 2017.

5. Prepare For the Holidays. The holiday season is closer than you may realize! So now is the time to create a checklist of what you have to do to prepare. This can reduce your stress level and allow you to enjoy the season with fewer financial worries.