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11 Financial Moves to Be Thankful For

Andrew Ferrette, CFP®, MSBA

Director of Financial Education

Last Updated
November 22, 2022
Happy senior couple in autumn park

Take These Steps Today – Your Future Self Will Thank You

This time of year, there’s a lot to be thankful for. If you’re hoping for continued financial gratitude, there are important steps you can take today to plan for a more secure tomorrow. Trust us, “future you” will thank you.

Move #1 – Establish a financial plan.

A great way to stay on track toward your long-term goals is by establishing a financial plan to guide your decision-making. Work with an experienced wealth manager to develop a custom plan that incorporates all aspects of your financial life.

If you already have a financial plan in place, be sure to review it on a regular basis to help ensure it continues to meet your changing needs. Your wealth manager can help identify any changes that should be made as your goals and situation evolve over time.

Move #2 – Establish a budget.

In order to achieve your future financial goals, it’s important to have a realistic budget in place. Begin by identifying both fixed expenses (those you must pay each month, such as your rent/mortgage, groceries, car insurance, utilities, etc.) and discretionary expenses (dining out, streaming subscriptions, gifts, vacations, etc.)

Once you’ve added up your expenses, compare the amount you spend each month to the amount you bring in each month. If you’re not able to incorporate an automated savings strategy or are spending more than you make, it may be time to cut back on some of those discretionary expenses. Your future self will thank you for making an effort to balance your spending.

Move #3 – Save in an emergency fund.

If you don’t already have enough short-term savings to cover three to six months of living expenses, now’s the time to make saving in an emergency fund a top priority. If something unexpected happens (e.g., job loss, flat tire, medical/dental expenses, etc.) you’ll be glad to have a financial cushion.

Move #4 – Open and begin funding a 529 college savings account.

It’s never too early to start saving for your child’s college education. And, given today’s rapidly rising college expenses, both you and your child will be glad you set aside some tax-advantaged funds to help pay for education-related expenses.

Move #5 – Increase your retirement plan contributions.

Making even small annual increases to your retirement plan contributions can have a big impact on your long-term savings. Consider upping your deferral by 1%-2% each year. You’ll be unlikely to even feel the impact on your take-home pay, but your future self will be grateful for the additional retirement savings.

Move #6 – Rebalance your portfolio.

When was the last time you reviewed your investment allocation? If it’s a been a while, it might be time to rebalance. Rebalancing to your original (or an updated) asset allocation helps lock in gains from top-performing asset classes/sectors and ensures your portfolio remains in line with your risk tolerance and investment objectives.

Move #7 – Take steps to lower your taxes.

It’s wise to check in with your wealth manager on a regular basis to identify any tax savings opportunities. Now may be a great time to take advantage of annual IRA contributions, tax-loss harvesting, asset location strategies and/or charitable giving to help lower your annual tax liabilities.

Move #8 – Review your beneficiaries.

Too often, an individual will think he or she has made a beneficiary change after a major life event only to find out later it was never fully executed. Unfortunately, this oversight often goes unnoticed or is discovered too late (for example, when a child is left out of a will or an ex-spouse is still listed as a primary beneficiary on a life insurance policy through work).

That’s why it’s important to set aside time each year to review your beneficiaries on all accounts, investments, trusts and other estate planning documents. Also, make sure the custodians you have designated to care for your children are still the people you wish to name and that your successor trustee remains reliable and relevant.

Move #9 – Establish (or review) your estate plan.

This can seem like an overwhelming financial task to tackle, but it’s a vitally important one. Without the proper estate planning documents in place, your loved ones may be at risk if something unexpected happens to you. Your wealth manager can help ensure the estate planning process is as simple and straightforward as possible.

Move #10 – Pay down debt.

While it may not be a fun priority in the moment, your future self will be thankful you made a commitment to paying off any outstanding debt as quickly as possible. Focus on putting extra money each month toward any outstanding consumer debt or student loans. Also, consider directing additional funds toward paying down your mortgage principal. Every additional payment counts; the sooner you tackle your debt, the sooner you’ll be able to achieve financial freedom.

Move #11 – Ensure you’re properly insured.

It’s not enough to simply grow your wealth — you must also protect it. Your wealth manager can help review your existing insurance policies and identify any gaps in coverage.

Need some help implementing these smart financial moves? Creative Planning is here for you. Our experienced professionals work to ensure every aspect of your financial life is well cared for and working to help you achieve your long-term goals. Schedule a call to learn more.

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This commentary is provided for general information purposes only and should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.

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