Tips for Keeping Your Financial Resolutions

Joseph Huml, Vice President/Retail Regional Manager huml_portrait

Whether you are among the 41 percent of Americans who typically head into the new year equipped with a list of resolutions or are among those who just want to get your finances in shape, knowing how to move the dial from intent to progress can be tough.[1]

Here are some tips to help you succeed in boosting your financial health in 2017.

  1. Conduct a credit cleanup. Sometimes it helps to clear the slate by consolidating high-interest debt into lower rate loans. Homeowners, in particular, often find financial relief—along with financing for home repairs or unexpected expenses—by using a home equity line of credit (HELOC). Not only is the interest rate on this type of debt more affordable than other types of personal loans, the interest you pay may also be tax deductible.
  1. Join the club. To avoid feeling overextended by holiday spending next January, open a Club Savings Account this January. Arrange to have a small amount ($10–$25) transferred from your checking account with each paycheck. In late November, the accumulated amount will be transferred back into your checking account just in time for you to start shopping for the 2017 holiday season.
  1. Get more than credit. Compare the rates and rewards you receive on your current credit card to see if there are more attractive deals out there. Also, with many issuers offering attractive introductory rates for new accounts, moving your outstanding balances could potentially save you money.
  1. Up your reserve. While having an emergency reserve equal to at least three months of your regular expenses is advisable, it can be hard to achieve. A more attainable goal is to try to build up your emergency reserve gradually. For instance, consider setting up an automatic deposit for a modest amount from each paycheck that will allow you to end up with an additional month’s worth of emergency reserve by year-end.
  1. Experiment with bursts of retirement savings. While it’s hard to hit the maximum contribution limit to your retirement savings account each month, try raising your contribution during the three months a year when your expenses are lighter. These short bursts can add up over time.
  1. Get a second opinion. Take advantage of free investment consultations when they are available. Sometimes, a banker can see a better way to save on fees or interest expenses and may be able to provide insights into ways of allocating your investments for expected market changes.
  1. Improve your score. Review your credit reports and scores at least annually. Since your score influences the interest rates you pay—and even employers and landlords look at them—it’s beneficial to make sure yours is as high as possible. When you review your credit reports, look for any errors or omissions. Pay attention to the timeliness of the payments you do make. Late payments and skipped payments are the biggest detractors to your score.

For more information on how we can help you keep up your resolve to improve your finances this year, visit us here or call 1-877-866-0202. We can’t wait to talk to you about what we can do to help you make this your best financial year yet.

A Different Way of Investing

Rich Gartelmann CFP® Senior Vice President/Head of Wealth ManagementRich Gartlemann Bio Picture

More often than not, when people talk about their investments, they talk about how well they did versus “the market” or about how much they gained in a single stock. The problem with measuring performance this way is that investing really isn’t like a sporting event where you keep score against an opponent. The only way you “win” is if you have enough money to achieve your financial goals. If you don’t, it won’t matter that your portfolio beat the S&P 500 Index for 10 years straight.

Focus on Results, Not Numbers  

When asked about their goals, often people will say, “I just want to have a million dollars by the time I retire.” That is a big round number, but is it enough? Too much? It depends on the type of retirement you want and the sources of income you’ll have available to support you.

Similarly, there are many investors who start selling stocks and buying bonds when they turn 65, because they believe that when they hit this age they need to invest conservatively. It may be the right action and, depending upon the current market condition, it may not even be a conservative move. Interest rate risks and rising inflation rates can devastate bond investments at certain points in an economic cycle.

If a person turning 65 today is in good health and still enjoys working, they are probably not ready to retire. Even if they are looking forward to retiring, they need to think about how to manage their assets in a way that will support them for another 30 years.

Match the Investments to the Timeframe

The trick to financial planning really isn’t the math as much as determining the journey. Think about where you are in your life and what you want to achieve next. Then, decide what you hope to achieve after that and, from a financial standpoint, what you wish to achieve in the long term.

The list will change over time, and it’ll be different for everyone. However, it may include things like:

  • Buy a home
  • Earn a graduate degree
  • Start a business
  • Pay for my children’s education
  • Pay off my home
  • Buy a family vacation home
  • Eat out whenever I want
  • Travel more
  • See every professional sports team play a game at home
  • Afford health care expenses
  • Avoid estate taxes for my family
  • Support charitable causes
  • Retire early
  • Just keep doing what I love and not retire

To know what you need to afford what you want requires adding some details to your goals and a timeframe. From there, your advisor can work with you to set a dollar goal and calculate how much you need to save to achieve it, if it is an expense. Your advisor can also help you decide how much you need to invest and how to invest your savings to create enough income to achieve ongoing goals, like retirement.

When it comes to investing, we focus less on the big numbers and more on helping you achieve big results.

For more information on how we approach and deliver goal-driven wealth management services, visit us here or call 630-844-5730. We can’t wait to talk to you about what we can do for you today.

 

Non-deposit investment products are not insured by the FDIC; not a deposit of, or guaranteed by, the bank; may lose value.