Financial Empowerment in the New Year: Resolutions for a Secure Future

Do you want to feel relaxed, confident and happy about your finances?

It is possible - but I suggest you reframe this goal as a gift for your future self.

There will be some leg work in the present that will pay off towards a more financially secure future.

Today - I am focusing on 5 resolutions (or gifts) to empower you to be financially confident and have the confidence that allows you to live your life to the fullest!

The 5 resolutions we are talking about today are:

1. Mastering budgeting basics
2. Boosting savings habits
3. Start a journey to be free of debt
4. Educate yourself on investment basics
5. Gauge your retirement readiness

Resolution 1: Mastering Budgeting Basics

Confession time: I hate the word budget.

It gives me shakes and has me thinking of an unrealistic plan that I don’t have confidence in.

BUT if I adjust to think of “Spending Plan” and “Savings Plan” suddenly my shoulders drop (my jaw unclenches too) and I have a lot more confidence in the success of these plans.

So if you too are looking for a Spending and Savings Plan - GREAT! It’s actually a relatively simple process.

The first step is to track your spending.

Two ways to go about this:

1. Pull out a pen and paper and start tracking
2. Download your bank and credit card statements from the last 3 months

Once you have this information you need to familiarize yourself with the data.

For the next step, plan on using a subscription service, app, excel or google sheets. You are going to break down your spending habits into categories. You can be as detailed as you like, but I suggest starting broad: Housing, Food, Self Care, Transportation, Other.

Once you have the spending broken out into those categories you can start to create subcategories if you like or you can move on to the next step.

Now look at the information in the categories- how does it look to you?

Questions I ask at this point:

• What does cash flow look like? (Money coming in and then getting spent) Is there any cash left over at the end of the month?
• Does this budget allow for fun? All work and no play does BAD things on mental health and that is no good! The biggest budget buster I see is when a plan doesn’t allow for the random night out or something small that still makes you happy (maybe a hobby or gym membership)
• How sustainable is this plan? If you aren’t going to follow the plan, what is the point in making it?

After you have honestly answered the above questions, it is time for more self reflection.

Are there places you can shift assets? Things you can live without? Lifestyle changes that need to be made?

Maybe you are in a GREAT place (congratulations) and just want to maintain-kudos!

Are you putting any money away for savings? Do you have an emergency fund? Is there a retirement fund you can boost contributions towards? Any long term goals you want to plan for?

Either way you want to have a plan and direct your hard earned money to where it needs to goas opposed being reactive to situations as they come up and demand cash.

That brings us to our next resolution -

Resolution 2: Boosting savings habits!

Having money to back you up will give you confidence, reduce stress and increase your ability to take risks towards your goals and dreams.

That being said how do you save? First think about WHY you are saving- what are your goals?
Some people want to retire early, others want to travel, maybe even save towards a larger purchase (new car!).
Whatever your goal is, give it the respect it deserves and see what it will cost.

Honor the goal with a number-even if it is a REALLY REALLY big one.

Next, come up with a plan of action- how are you going to save? I am biased towards automation- it makes your life easier if you don’t have to remember to do it and it is still getting done.

There are several savings accounts out there that you can open with low minimums and will help you set up an automatic withdrawal from a checking account.

Now that is all well in good, but is that going to help me get to my savings goals fast? Maybe, it depends.

There are ways to increase your savings speed:

1. Revisit your budget (you did that, right?) and see if there is anything you can trim or cut out anything to free up cash towards your savings goal.
2. Find ways to make more money- Are you due for a raise? Or perhaps you have a great side hustle idea
3. How are you saving the money? Is it in cash or invested with your timeframe in mind?

The point is that saving is a good idea - When you have a goal in mind it’s that much better!

Resolution 3: Start a journey to be free of debt

Debt happens. Depending on the situation, it might even be for a great reason - it still happens.

Paying it off is still important. There are a variety of reasons why paying off debt should be a priority (credit score, freedom to pursue goals, having the monkey off your back. . .)

The easiest way to go about this, is to go back to excel, google sheets or your budgeting software if it allows and list all of your debts and the interest rates associated.

Now take a few breaths- I find that can be helpful- and sort the debts by interest rate.

There are a few ways to tackle this -

• What are the smallest debts? If you pay those off first, it will give you the satisfaction of accomplishment and free up cash to pay off the bigger debts
• What are the highest interest rates? Those are more expensive in the longer term and you are saving yourself money that could have been spent on interest.
• A combination of the first 2

The last thing to take into consideration- if you are in a position to get loans forgiven, make sure you understand the taxable ramifications (if applicable).

Resolution 4: Educate yourself on investment basics

Knowledge is power! Knowing about investments is a great thing- Are you still aiming for a financially secure future? It’s great to have confidence in your investments by having a good understanding of the basics.

This a blog, not a novel, so let’s be brief today! You want to learn about different investment principles - I am a big fan of Investopedia.com, they are comprehensive but will also have relatively easy to understand content.

You don’t have to be an expert, but understanding concepts is a good idea. Start with answering the following questions:

• What is compound interest?
• What is a stock?
• What is a bond?
• What is the difference between a mutual fund and ETF?

Once you get to the point of feeling confident on the definitions you can further your financial education. Topics like diversification and asset allocation are more advanced, but I have confidence you will get there.

Resolution 5: Retirement Readiness

Are you ready to retire? That can be a loaded question depending on who you ask.

It’s still a good idea to assess your retirement accounts (if they exist) and have a clear idea of what your goals are.

To address the elephant that may have joined the conversation - What if I don’t WANT to retire?

For everyone else in the conversation - yes, this comes up..

The reality is you don’t have to stop working if you don’t want or have to. It still makes sense to plan for a nest egg to make your life better and easier no matter what your working goals entail.

For the rest of the crowd who may want to retire -as soon as now in some cases - saving as much money as soon as possible towards that goal is a great plan!

There are a variety of ways to save towards retirement in a variety of accounts - like an IRA or a 401K.

PSA - if you have a 401K at a company you no longer work for, make sure you are fully educated on all of your options to ensure you are invested the best way for your situation.

Regardless of the type of account (or accounts), you want to look at how you are invested. Some of the things to take into consideration are risk tolerance, time frame, your allocation of investments elsewhere and amount of money you have accumulated.

Do you feel like the investments are inline with your goals and values? How do you feel about where you are towards your retirement goals?

Either way, your future self will thank your present self for taking a moment to look at your current situation and take action from there.

WHEW! We talked about a lot.

Do me a favor and take a deep breath in and another big breath out.

You got this.

And if you feel like you may need support in any of these resolutions- reach out for support. I genuinely love helping people in their journeys to reach goals.

The punchline is this: You deserve to feel confident when it comes to your financial situation. Take your financial present by the hand and start with the first step. By taking consistent and small steps you will move towards a more empowered financial future.

Brianna Beski is a financial advisor and CDFA at Raymond James, based in Colorado. She and her team focuses on helping people navigate transitions in life and secure their financial futures. For the rest of the story, please visit her website or email her at brianna.beski@raymondjames.com.

While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJA, we do not render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Brianna Beski of Raymond James Branch 3BA and not necessarily those of Raymond James or Raymond James Financial Service.

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC

Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation.

Contributions to a traditional IRA may be tax-deductible depending on the taxpayer's income, tax-filing status, and other factors. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty.

401(k) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty.