10 Financial Goals You Need In 2021
When I was young my family summer vacations were spent at Watch Hill in Rhode Island every year. My father worked in a factory so it would shut down for 2 weeks and we would head to the beach. Now this was Watch Hill circa 1960’s. The Ocean House was there but minus the grand renovations of current times.
The Olympia Restaurant was there but it was less cool, and not to mention, the only place to eat in town. We stayed at a boarding house (think AirBnB) because there weren’t any hotels except for the OH and that was pricey even back then. Some of the houses were grand but Taylor Swift hadn’t moved in yet. Taylor Swift hadn’t even been born yet! Watch Hill was not the less popular sister to Newport then. It was just a quiet beach town.
What I remember most vividly was the Carousel. It was called the Flying Horses because it had no platform beneath you. You just got on your horse which was suspended from the ceiling and you flew around in circles.
It was unlike any Merry Go Round or Carousel I had been on. There was a long metal arm that dished out rings as you whirled by. If you were lucky enough to grab a brass one, the next ride was free. Each year we went to Watch Hill, this was on my radar… and one year I hit the mother-load.
I got on my horse, rode around and grabbed the brass ring! Free Ride! Then I grabbed it the next ride and the next and the next. I remember my older sister’s excitement for me soon faded to disappointment as it meant every free ride she had to stand around and wait while dinner hung in the balance.
The Brass Ring- what we all wish for as we ride the carousel of life. There is no strategy to grabbing it because no matter how they load the gun, it all depends on whether the kid in front of you grabs a ring or misses. Luck is all you have!
When it comes to financial goal setting you need more than luck. As we move further into 2020, let’s review the basics that will set you up for grabbing the brass ring for your future.
Establish an Emergency Fund.
Everyone should have an emergency fund. This should equal 3-6 months of income or living expenses. It is meant to be there should you suddenly lose your job or have an unforeseen expense creep up. It needs to be in a safe, liquid account such as a savings account.
Build a budget.
A budget sometimes makes people cringe because it means compiling large amounts of data which forces us to see where we really are spending our money. However, it is essential to see our spending habits if we need and want to change them.
Review your insurance coverage.
Decide how much life and disability coverage is needed in addition to your employer’s group coverage. Many times group coverage is not portable so you want to make sure you are protected no matter where your job takes you.
Create/review wills.
Meet with an attorney to discuss what your final wishes are and be sure you have the proper documents that will execute those wishes. Wills, Trusts, Powers of Attorney and Health Care Directives should all be considered.
Review your investments.
Be sure you are investing according to your risk tolerance. Check in with your financial advisor to be sure the money you put away is working for you and that you have it aligned with your goals, time horizon and risk appetite.
Eliminate credit card debt.
I propose this should be a priority for anyone who doesn’t pay off their card each month. The reality is you are sometimes paying 25% more for every purchase when you factor in the interest charges.
Take advantage of retirement plans.
Invest in your future by making contributions to 401ks (especially if there is a match) and IRAs/ROTH IRAs. No one ever told me they saved too much for retirement!
Pay off student debt.
Just like credit cards this will stay with you for a while, preventing you from moving ahead with your financial and life goals. Ask a financial advisor to explain your options for loan forgiveness and repayment.
Organize your financial life.
Create a folder (paper or electronic) that contains all the important documentation you have. Include your life insurance policies, wills, summary of employee benefits, bank accounts, investments etc. Most importantly, include the names and numbers of your financial advisors so your loved ones can have easy access in a time of need.
Shred unnecessary documents.
Saving too much documentation may not be helpful. It gets confusing trying to understand what is actually current. By all means save necessary tax info but old policies no longer in force should be destroyed and updates to plans should replace the old. Be sure to securely shred these items.
Written by Lori Johndrow
Lori is a 35-year veteran in the financial services industry. She is both a Retirement Income Certified Professional ® and Accredited Investment Fiduciary ®. Both areas lend themselves to helping her aid people in creating lasting wealth.
