It’s a new year, fresh start…and that includes financial goals! When the clock strikes 12 and the calendar flips over to a new year, it’s often a fresh start for many. While there are many resolutions and goals made, the start of a new year is always an interesting time both personally and professionally. It’s not always happy and can be challenging for some but it does give us an opportunity to reflect on where we’ve been, or it may push us forward to look ahead at what the new year may bring.
At the end of 2019 we talked about a year end checklist as an opportunity to review your financial situation. In this blog, we’re going to look ahead. We may touch on some things that are new to you, things that you will be starting for the first time or stopping for the first time in your financial life.
Just like the preacher on Sundays, we take a three-point sermon approach to our blogs. Remember, this information is simply food for thought and you should always consult with your tax advisor or financial advisor or you can always call us here at North Main Financial to discuss your specific situation.
We’re first going to touch on how you can start, or increase, an investment plan. Then we’ll move into the discussion of life insurance. From there we will move into visiting with a financial advisor for the first time. It’s a new year, fresh start and that includes financial goals!
Starting or increasing an investment plan.
We see this with some regularity for younger clients but also with more advanced clients. This can be any number of different things. Starting to invest is self-explanatory but if you haven’t been saving or investing, the new year is often a good time to give that some attention.
Here at North Main Financial we encourage clients to start saving by setting up an emergency fund or cash savings fund. First, look at your budget and determine an amount of money you can set aside that’s comfortable for you. Set aside this determined amount of money every time you’re paid, whether it’s weekly, twice a month, or once a month into a cash savings fund, emergency fund, or money market account. Something that you know will not fluctuate in value. These funds aren’t designated for a specific goal. They are simply there for an emergency like a car repair, un-expected home expense, medical emergency, you get the picture.
Make sure if you are starting something for the first time, that you get into the discipline of doing it. We encourage clients, if they aren’t currently investing, to not make a radical shift from a budget standpoint. Don’t jump into the deep end of the water with a large amount. We strongly encourage you to start small. There is more of a benefit to you if you start small and increase with small steps over time than to jump in with a large amount and stop doing it.
For example, choose an amount you can set aside comfortably. Then look at increasing that amount gradually if you can in three months, six months, a year, whatever your financial life dictates. Before you know it, you have an emergency fund accumulated as well as an investment account. And you never even missed what went into it.
Starting or adjusting your life insurance coverage.
Life insurance is not one of the most enjoyable conversations to have. In fact, it’s very challenging because you’re thinking about your own demise. However, from a financial planning standpoint, it’s very important that you give life insurance consideration.
You may be newly married, or have a new child, and therefore need to adjust your life insurance plan if you have one. Or it may be that you need to consider one. When deciding on life insurance you need to consider what the impact would be on your budget or to the spouse that remains if the bread winner passes away.
Life insurance may not make sense for you. You may be in a space where you don’t have a life insurance policy. It’s very important that when you’re dealing with an agent they identify if you have a need for it or not. Life insurance is a very definable need and not everyone needs it.
Now, if you do have a life insurance policy it’s a good idea to review it because you may need to adjust. For example, if you have a second child, or go from a dual-income household to a single-income household, or maybe you have experienced a divorce. All these reasons, and many others, may be reason to adjust your policy.
If you are looking at estate insurance or something that is going to handle estate taxes it can be very important to look at life insurance. Tax laws have changed significantly which affects estate planning, so you want to make sure you have enough coverage. Please reach out to your attorney, your advisor, or reach out to us at North Main Financial to discuss your specific situation.
Sitting with an advisor for the first time.
Perhaps you’ve decided to sit with a financial advisor for the first time in the new year. This can be intimidating and challenging the first time. You may wonder about what you don’t know, what’s expected of you, and it’s not the kind of thing that’s always easy. Here at North Main Financial the first visit is meant to be a get to know you and to get an understanding of what your financial space looks like. We want to see if we can be helpful to you.
Consulting a financial advisor isn’t always needed. If not, at North Main Financial, we’ll let you know that you don’t need help from someone like us and maybe you can do it on your own or with your current advisor. This can be true relative to your taxes, real estate holdings, investment portfolio, it’s not limited what you expect from a financial advisor. Good financial advisors will look at your overall financial picture. They want to make sure that the different pieces of the pie go together in ways that make sense for you.
It’s important to establish a relationship with an advisor who not only considers the things they are managing for you, but also the things they aren’t directly managing for you. For example, at North Main Financial, we don’t manage real estate directly. We help clients manage their real estate through different real estate investments. We have many clients that have real estate investments and while we don’t directly manage them, we always take them into consideration when managing our client’s financial lives.
It’s a new year and a fresh start for financial goals so, as you jump into 2020 look at your overall investment plan. And if you are just starting, take it slow and set aside an amount that’s comfortable for you into an emergency fund. Second, evaluate your life insurance plan, whether you need it or are adjusting it. Third, if you are reaching out to an advisor for the first time make sure they are considering all the different parts of your financial plan.
Interested in hearing more about this topic? You can listen to the full episode of the North Main Financial radio show on WSIC by clicking here:
If you have questions about your financial goals or would like to talk with us further about our services, give us a call at (704) 987-1425 or visit us at www.northmainfinancial.com. If you wish to schedule an introductory meeting, we would be happy to meet with you at no cost or obligation to you.
These Blogs are provided for informational purposes only and should not be construed as investment advice. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of SagePoint Financial or Iredell Broadcasting.