In our last post, we discussed the framework for how to set financial goals in 2024. In this post, we will take that a step further and actually look at the types of goals we should be setting for this year. Okay, just so we keep up with all the buzzwords, let’s go ahead and call them resolutions.
Assess Your Income and Create a Realistic Budget
I did my part contributing to the travel industry in Wyoming and Montana over the holidays, visiting my family in Lander, WY and my wife’s extended family in Ekalaka, MT and Richey, MT. Lots of food was eaten, presents opened, and games played.
If you played any board games over the holidays, you know how important it is to know the rules you’re playing by. In the same way, achieving financial success in 2024 involves knowing the financial rules that you’re playing by. The beginning of the year is the perfect time to examine the income your household will be expected to bring in during 2024. From there, you can go ahead and begin to set an overall budget of how much of that can be spent, saved, invested, given, etc.
This exercise is more or less a “rough draft” of how you expect the year to go from an income/expenses view. Stay tuned for an upcoming post on how to set up, maintain, and actually master your budget.
Review Your Current Investment Allocation
Reviewing your investment allocation is more than blowing the dust off the statement in your file cabinet and quickly flipping through the pages. It is important to take the time and actually look at your mix of stocks/bonds, income you received from dividends/interest, and your overall asset location.
If you are still a long way away from needing to withdraw from your investments, or if you have multiple goals in mind, the more important it is to make sure each investment account is doing what it is supposed to be doing. If you are in retirement or withdrawing from your investments, check out our post on The 4 Key Asset Buckets in Retirement.
Evaluate Your Debt Level and Payment Strategy
If you’re working on paying off debt, you could benefit from evaluating your current combined debt level and your strategy(or lack thereof) to pay it off. This could involve the total balance of your debt, how much of your cash flow is going towards debt payments, the amount of principal vs. interest you are paying, and when you are expected to pay it off. Many times, seeing the entire picture can help to trigger the next best step to take.
If you need help getting a strategy in place to pay off, or just to better understand your debt situation, schedule a time during one of our Office Hours sessions for a low-cost, no-hassle way to get a customized plan for your debt situation.
Make Sure You’re Working with a Financial Advisor you Trust
If you don’t currently have someone in your corner to help you navigate the way to success in 2024, now is the time to start looking. However, before you start googling away, make sure you follow some basic guidelines before launching in:
- Educate yourself. There are MANY types of “advisors” out there. However, it is important that you understand how the advisor is compensated, what is their area of expertise, and who is actually paying him or her. Check out this guide on How to Get Financial Advice Right for You.
- Credentials, education, and experience. The gold standard for financial advice is the CERTIFIED FINANCIAL PLANNER® designation. Not only are certificants required to meet the criteria in the above 3 areas, but must also pass an ethics requirement. You can find a CFP® meeting these standards through the Find an CFP® Tool on the CFP Board website.
- Working in your best interest. A fiduciary takes the requirements in number 3 to the next level. Further, a fee-only advisor will take these standards up another notch. You can locate a fee-only advisor through these websites:
XYPN Find an Advisor
- How you will pay for services. Traditionally, an Assets Under Management(AUM) has been the most common way to pay for unbiased, fiduciary financial advice. However, an ongoing fee-for-service model is a growing way to pay for advice without having to meet an asset minimum. If you have enough assets to qualify for a traditional AUM billing method, make sure you are also getting financial planning included from a bonafide CFP® and not just solely investment management.
- Fit with your personality. Of all of the factors above, this is probably the hardest aspect to define. However, the fact is that we as humans work achieve the best success with those we can connect with. Even if you are working with the most intelligent and knowledgeable advisor, a lack of alignment with values, family, priorities, vision, or even shared interests can create a blockage to achieving success. One of the best ways to ensure a good fit with your future advisor is to ask a trusted friend or colleague if they can refer to you to someone they’d trust. Usually, someone our friend trusts is someone we can also trust.
If you’re not currently working with a financial advisor that meets the criteria above, get in touch with us today. We’d love to get to know you and find out how we can add value in your situation.
This content is developed from sources believed to be providing accurate information. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Evergreen Financial Group, LLC is a registered investment advisor offering advisory services in Montana and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. This communication is for informational purposes only and is not intended as tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. This communication should not be relied upon as the sole factor in an investment making decision. All opinions and estimates constitute Evergreen Financial Group’s judgement as of the date of this communication and are subject to change without notice. Evergreen Financial Group does not warrant that the information will be free from error. The information should not be relied upon for purposes of transacting securities or other investments. Your use of the information is at your sole risk.