How to Get Your Financial House in Order in 2017
We're flashing back this Friday to a post about getting your financial house in order. How'd you do in 2016??
January is the perfect time to look back at your financial activity over the last year to take stock and decide if you should make any changes to better meet your financial goals. Take some time to review what you earned, saved and spent in 2016. Your W-2s, account statements and year-end financial summaries make this a simple task. It may take some time but it will be time well-spent. And isn’t a secure financial future worth it? So here is how to get your financial house in order.
Did you save as much as you wanted?
Whether you set a specific savings goal (like 10% of gross earnings), or simply vowed to save more, now is the time to see how it went. Start by reviewing your account balances. Ask yourself these questions:
- How much did you save for your retirement or the kids’ college fund?
- Did you build up a healthy emergency savings account?
- If you were saving for a major purchase, did you meet your goal?
To ensure steady financial progress, challenge yourself to save a little more this year. If you paid off a debt or got a raise at work, earmark that money to your various goals to boost savings faster!
Did you pay down debt?
Be sure to save year-end mortgage statements, credit card statements, and auto financing statements. These documents will show you the amount of debt you paid down and the amount you still owe. If you’re lucky, you may even discover you paid off more debt than you thought. Keep these statements for future reference so you can track your progress efficiently from year to year.
Did your investments perform to your expectations?
You should receive year-end statements for all your investment accounts. Review them to see how your accounts have been performing. Statements will typically show how much you’ve earned (or lost) over the last quarter, year, and since the account was established.
- Did your accounts keep pace or exceed the industry performance?
- Did performance meet your expectations and needs?
- Should you make any changes based on your tolerance for risk or any changed circumstances? If yes, talk with your certified financial planner soon to make course corrections for 2017.
How much did you pay into Social Security?
If you pay into the Social Security system, the W-2 you receive from your employer will show how much you paid via payroll taxes withheld from your paychecks. You should receive this form by the end of January.
If you’re self-employed, you report and pay these taxes yourself (self-employment taxes). These taxes help fund your future Social Security benefit payments. But many wage earners have no idea how much to expect for these payments.
Vow to check your Social Security statement each year to find out how much you’ve been contributing to the Social Security system and how much to expect in future benefits. To access your annual statement, set up an account at www.socialsecurity.gov.
How does your financial house look?
Your next step is to look at your “big financial picture” and determine if your finances improved over 2016. This involves looking at your income, current debt load, savings and investments. If your finances didn’t improve, why not?
This big picture review should lead you to think about changes to make this year. Start by asking the following questions:
- Are your financial goals the same or different than last year?
- What are your biggest financial concerns?
- Should you revise your budget now that you reviewed your earnings, savings, and what you spent?
- Do you need help or advice with any of your financial goals or concerns?
To help kick start 2017 even more, check out "Five tips to achieve your financial goal."
Although everything you learn about your 2016 finances may not be rosy, you can use the good and the bad to adjust your strategy to ensure a stronger financial position in 2017! If you need help with budgeting or options to pay down debt, LSS Financial Counseling can help with free and confidential counseling. No pressure, no judgment … just honest answers from a trusted source. Call us at 888.577.2227 for your free financial counseling session or GET STARTED ONLINE now.
By Barbara Miller