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03.10.23

Your Guide to Financial Success | Part 1

Managing your personal finances is an ongoing process that requires discipline. Most people are successful at making sure the bills get paid and often saving a little on a regular basis. However, managing your finances effectively is more than just handling the daily or monthly tasks. Use this guide below to jump start your way to financial success this year.

If you haven’t already, start by establishing financial goals for the year, and create a plan to accomplish them.
 
  • If your goal is to save on a regular basis, establish an automatic savings plan to have a certain amount transferred from your checking account to your savings account each month. You can use this strategy for long term goals like retirement or saving for a down payment on a new home and short term goals like having money for vacations or major purposes. Check out our Savings Calculator to see how much money you can accumulate when you save consistently.    
  • If your goal is to pay down debt, identify concrete steps you can take. Writing the steps down will provide a sense of priority and make it more likely that you will actually take those steps. Our Debt Payoff Calculator can show you how to pay off your debt faster.

Prepare a personal balance sheet. 
 
  • Taking control of your financial future is a process. And, as with any process, it is important to monitor your progress. Preparing personal balance sheets each year will enable you to not only better understand what you have but also how your assets and liabilities may be changing.
  • Your assets should include bank and investment accounts, retirement plans, IRAs, real estate, personal property and business assets.
  • Your liabilities should include mortgages, credit card balances and any other loans you may have.

Get organized for filing your tax return.
 
  • Employers usually provide W-2 forms in late January. 1099 forms from banks, credit unions, brokerage firms and mutual funds usually arrive by early February.
  • Gather other information such as charitable contribution receipts, tax receipts and documents you may need.

Be sure your tax returns are filed on time. 
 
  • You can file for an extension if you need more time to complete your return, but be sure to note that an extension does not delay when you may need to pay the amount due.
  • If you make quarterly estimated income tax payments, be sure to include them in your cash flow or budgeting process.
  • You may want to prepare or update a schedule of some of the major items found on your last several tax returns. This could include total income, adjusted gross income, itemized deductions, regular income tax and other taxes like AMT or the net investment income tax. Understanding your tax situation better may help you identify where there are opportunities for saving.
  
Create or update an inventory of your belongings. This information can be essential if you ever have to make an insurance claim.
 
  • Update your inventory on a regular basis. Updating annually may be sufficient unless you acquire additional or high value items.
  • If you have a video inventory, be sure to store a copy in a secure location away from your home.

Review your insurance policies.
 
  • Be sure to have the coverage you need for your home, belongings and car.
  • Review your health insurance to make sure you understand the provisions of your policy. And if you're enrolled in a high-deductible plan, you may want to consider using a Health Savings Account to earn a competitive interest and take some of the stress out of paying for medical care.
  • Review the deductibles on all your insurance policies. You may be able to reduce your premiums by accepting higher deductibles.
  • Consider an umbrella liability insurance policy. It can provide additional coverage above what is included with your home and auto policies. Usually, umbrella policies are relative inexpensive.
The suggestions may not match your personal financial schedule. However, they can serve as a reminder to make sure you address important issues that impact your overall financial picture. Our bankers are always available for a financial check-up. Schedule an Appointment to get started.

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