Happy New Year! Now that 2020 is upon us, we want to give you a plan to set yourself up for financial success and prosperity in the new year. The new year always brings resolutions and we want to make sure you are on the right path to make 2020 an amazing financial year.
1. Evaluate Your Current Financial Situation
Before we get into setting financial goals for 2020, I recommend to first recap 2019 (if you haven’t already) and assess where you are right now. This is a perfect time to add up all of your debts, savings, retirement, loans, and other payments. By understanding your net worth, you can understand where you are so you can set the right goals.
2. Set Financial Goals
Now that you understand your current financial situation, it’s time to set some financial goals. What are some of the biggest financial goals you want to achieve in 2020?
Here are a few questions to get yourself thinking:
These are just a few things to think about when setting goals for 2019. Once you have a few major goals, then you can break them into smaller goals to help you get to the destination.
If you want professional advice to make sure you’re addressing the right financial goals for 2020, make sure to schedule a consultation with us today.
3. Pay Off Debt
According to Credit.com, “Student loans are now the second-largest debt category in the U.S., trailing only mortgage debt. As of early 2019, total student loan debt is approximately 1.52 trillion and growing. In 2018, total student loan debt rose by $79 billion and in the first quarter of 2019, the number rose by $29 billion.”
Credit card debt isn’t great either. According to The Balance, “The average credit card debt per U.S. household was $8,398 in June 2019. That’s $1.07 trillion in total credit card debt divided by 128 million U.S. households.”
If you have debt, make 2020 the year where you make a big dent in your total debt. If you’ve had this goal but haven’t made much progress, consider tracking your progress or trying a new method like the snowball or avalanche strategy.
The snowball method is where you pay off the lowest balance first. By making extra payments on the smallest loan first, can give you a psychological boost in your debt journey.
Another strategy for paying off debt is the avalanche method, where you pay the highest interest first. The avalanche method is more financially effective as your extra payments go toward the high-interest loans that accrue every month.
4. Review Your Portfolio
The start of a new year is always a good time to review your portfolio and rebalance if necessary. Depending on your holdings, your allocations most likely shifted in 2019 so it important to rebalance and make sure they align with your goals and risk tolerance.
If you’re already a client, contact us with any questions. If you want some help reviewing your investments, make sure to schedule an appointment with us. We can review your current holdings, past returns, and make sure you are set up for success in 2020.
5. Update Your Will
The final thing to evaluate for your financial checklist in 2020 is to update your will if needed. While it’s morbid to think about at times, you want to make sure that if anything does happen, your family is protected. The last thing you want at a difficult time is having to worry about financials.
If you spend the time updating it early in January, you won’t need to think about it as the year progresses. If you had any big life changes in 2019, this would be a good time to make any necessary revisions.
Hopefully, these tips will help you end the year right and set yourself up for a prosperous 2020!
If you have any questions or would like help getting started, we encourage you to schedule an appointment with us today.
Bayntree Wealth Advisors, located in Phoenix and Scottsdale, Arizona, provides comprehensive financial planning and wealth management. The Bayntree team specializes in all aspects of financial health, including retirement planning, risk management, investment advice, tax strategies, estate planning and insurance.
Bayntree does not provide specific legal or tax advice. Please consult with your tax advisor or legal professional for guidance with your individual situation.