Are You Ready for a New Year & New Financial Focus?

2020 has been a year unlike any during our lifetimes with the COVID-19 pandemic and a poor economy. Many have been impacted with lay-offs and job losses and realize they were unprepared financially. With the start of a New Year, are you ready to focus on ways to improve your financial life? Writing down what you want your financial focus to be on in 2021 and having it visible is essential to your success. Much like a written financial plan, you are more likely to follow your financial goals when they are in writing. After you’ve written down what you want to focus on financially in 2021, tell others about your progress and failures. Here are some things you may want to focus on in 2021: Decreasing spending- The less you spend, the more you can save into an emergency fund, pay toward debt reduction, or save for retirement. Review your spending this month to determine what you can eliminate and what you can reduce. If you feel like you were financially insecure in 2020 or on the brink of it, 2021 is the year to take control of your financial future. Reducing your debt- If you are one of the ‘revolver households’ that carries credit card debt month after month, make 2021 the year you pay off your debt, cut up the cards, and close credit card accounts.You may want to consider paying down your mortgage, refinancing, or moving to a home that costs less. If you become unemployed in the future, making your mortgage payment is essential to remaining sheltered. If you maintained employment in 2020 and have a higher interest rate than today’s rates, consider refinancing or making extra payments toward your mortgage.Pay off your auto loan, increase your monthly payment, or refinance the remaining term at a lower rate. Although refinancing may look appealing, confirm that the refinance saves you money and reduces your loan term. Start your debt reduction investigation by using financial calculators or consult your financial professional to determine if these ideas are appropriate for you. Establishing an Emergency Fund- Start with a minimum of one month’s expenses. A fully-funded emergency fund should have six months or more of expenses and should be in an account that you won’t access and one that’s not tied to market performance. Saving for Retirement- Set your retirement savings contributions up automatically increase year over year and make an effort to maximize your contributions in 2021. Additionally:

• Get Your Employer’s Retirement Account Match. Contribute enough to your employer’s retirement plan to receive your employer’s matching dollars. If you’re not saving enough to receive a matching contribution from your employer (commonly a 2-4% match), you’re throwing away ‘free money.’
• Take Some Risk. If you have your retirement savings in an interest-bearing account outside of the stock market, you will not keep up with inflation in retirement over time. Having 100% of your retirement savings tied to stocks may not be best for you, but all of it outside the market may not be either. Meet with your financial professional to determine your risk tolerance and portfolio allocations appropriate to your situation.
• Be Aware of Future Tax Implications. Part of your retirement savings should be in tax-sheltered accounts. Discuss your portfolio and each investment with your financial and tax professionals.
• Monitor Your Investments. Always meet with your financial professional for a financial review at least yearly to determine if your risk tolerance, fund choices, and the timeline for retirement are still on target. Receiving financial help from a professional is never a bad investment and can help you focus on your finances this year.

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