This time of year, everyone’s got their mind on their personal finances. Tax season has a way of doing that – highlighting the good and the bad of your financial habits. The stress and dread that people feel about tax season fuels a financial-preparation frenzy in the aftermath of filing. People set goals and make financial resolutions that, unfortunately, fade almost immediately after the rush to file and get squared away is over.
It’s easy to set goals and a lot less easy to keep them, but you can use this post-tax-season momentum to get rolling on your goals and make a plan to keep you and your family in good financial health year-round.
Check Your Pulse
Now that your taxes have been filed, it’s a good time to check your financial pulse Look at where you stand without passing judgement, right now you’re just focusing on taking stock of your total financial portfolio. Check in on your investments and your savings accounts – are they still performing in a way that reflects your retirement timeline? How are you doing with other financial goals – like saving for your kids’ college education? Sometimes you’ll find that the timelines you’ve set or the investments you’ve made no longer accurately reflect your lifestyle or your long-term goals.
Assess Your Habits
This is easier said than done, but it’s one of the key steps to creating a year-round financial plan to keep you on track. Not all habits are bad, so don’t beat yourself up too much. Maybe you spend too much, or invest too impulsively. Maybe you’ve formed good habits, like auto-contributing to your 401(k), IRA, or savings accounts with each paycheck. Having a list of all the consistent financial habits, good and bad, you see cropping up in your life can only mean getting ahead in the future.
Goal setting shouldn’t be an arbitrary process – at NewLeaf Financial Guidance, we advocate for setting goals that speak to your core values. Having financial goals that are structured around what’s most important to you – whether that’s your family, charitable giving, paying off hefty medical school loans, or growing your own business – results in you feeling more satisfied and confident in those goals. When you’re satisfied with the financial goals you set, you’re more likely to achieve them. So, take a holistic look at your values and set goals from there. We usually recommend setting up a three-tiered goal system: short-, mid-, and long-term goals to completely address the full spectrum of your finances.
Make a Plan
Having goals is one thing, but having a plan in place to help you achieve them is another thing entirely. Take the potential for financial stress out of the equation by making a plan that lines up with your values and addresses some of those negative financial habits you assessed earlier. Think about what might get in the way of you achieving your goals. This might be extra spending around the holidays, a car unexpectedly breaking down, or a family emergency that requires a little bit of spontaneity and flexibility on your part both financially and emotionally.
By preparing for these things ahead of time, or making a fallback plan that addresses the improbable and unexpected as best as you can, you’re making it easier on yourself to make good financial decisions down the road. This might mean you set up a rainy-day fund, or it might entail considering your insurance coverage to make sure you’d be financially capable of coping with the worst-case scenario before you’re right in the middle of it.
Don’t just prepare for the bad, plan for the good stuff that might happen, too. It’s not healthy to put yourself on a financial plan with no flexibility. It’s like going on a crash diet. The diet might last for what? Two weeks? But then you’re tempted by that plate of cupcakes in the office break room and five cupcakes later you’ve officially fallen off the wagon. Our advice? Factor fun things into your plan, and have them line up with your values, too. If you value time with family, plan for a vacation to spend time together. If you value the volunteering you do, plan for a sizeable donation part way through the year. This makes spending emotionally fulfilling rather than having it be impulsive and unsatisfying.
Need Help Checking In?
Going it alone can be overwhelming. Life gets crazy, and focusing on your holistic financial plan can easily fall to the bottom of your list. If you’re ready to use your post-tax-season momentum to get your financial plan in motion, we’d love to help. Feel free to reach out or schedule a meeting. Financial planning can be rewarding and staying on track can be easier when you’ve got us in your corner to help keep you accountable. Let’s get started!