The Connecticut Society of CPAs is very, very good at disseminating specific financial planning and tax tips not only to CPAs but also to the general public. Some of those recently caught my eye as being particularly easy to understand and right to the point.The society sent out a notice on its Web site about how the public could get their money matters in order after popping champagne corks, tossing confetti, and making New Year’s resolutions.
And here they are, in no particular order:
- Get Rid of Holiday Debt. The Society says that one should tally up how much is owed on each credit card and then develop a specific plan for paying off such debt, with the suggestion that the card with the highest interest rate gets nailed first. They also suggest that for further purchases, you should use either cash or a debit card. In other words, don’t spend what you don’t have.
- Savings is Paramount. It’s that old conundrum, pay yourself first. The Society recommends that even before you pay off all the bills, you set in motion some kind of plan that enables you to put something into savings. One suggestion, of course, is direct deposit. Your paycheck bypasses your hands and goes right into your account.
- Insurance Policies Need a Recheck. The beginning of the new year is the time to review all those various insurance policies to make sure you have the proper coverage and they are in tune with what is happening in your life. Doe the valuable items policy need a revision because you either added or subtracted jewelry? Is your homeowner’s policy in line with any increased value of your home?
- Retirement Savings are Critical. Keep in mind that for this year, you can contribute up to $15,500 to your 401(k) plan at your place of employment. Make that $21,000 if you’re age 50 or over. You should try and contribute as much as possible. At the very least, contribute enough to qualify for the full company match. If you have no such plan at work, look at the possibilities of opening an IRA, Roth IRA, or SEP plan.
- How’s the Portfolio? Again, the top of the year is a good time to compare what you presently have to your goals. Perhaps you need to rebalance your portfolio.
- Write a Will. This ensures that your personal belongings and assets go to those you choose to have them. It’s a simple enough matter. Keep in mind that without a will, your could risk having a court decide who takes guardianship of your children, depending on the circumstances.
- Organize, Organize, Organize. The Society believes strongly that tax planning is a year-round activity and one that needs to be planned correctly. Financial records must be organized so that everyone in the family knows where everything is.
Obviously, a comprehensive financial plan is essential for managing finances. As the society says, “A written plan motivates you to achieve your financial goals, provides direction, and offers a benchmark for measuring your progress.”And dare I say that a CPA can assist you greatly in this regard?
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