Breadcrumbs

Everyone has something they’d like to change about their finances.

Perhaps you need to save a little more, or there is a part of your portfolio that needs to be reassessed. Regardless of your situation, it’s important to remember that every aspect of your financial life is important to the health of your financial future – the steps you take today to solve your financial challenges will likely make a big impact down the line.

As you make your resolutions for 2017, we’d like to submit a few ideas for consideration which may help you better manage your wealth in the new year.

Take note of rising interest rates

As you may have read recently, interest rates are rising. While interest rate hikes tend to signify a more resilient economy overall, a rise in rates can also have a direct (sometimes negative) impact on a number of individual financial components. So, whether you plan to invest, borrow or save in 2017, it’s important to take the time to understand how rising interest rates can affect each area of your wealth.

In general terms, bonds tend to decline in market value during periods of rising interest rates; however, there are many ways to strategically position your fixed income portfolio in these environments.

Interest rates may also impact many other areas of your finances, like borrowing costs and wealth transfer strategies.  There is no one-size-fits-all approach in these matters, but rising interest rates should serve as an alert to reevaluate your strategies in both of these areas.

Keep track of what you spend

This sounds like a fairly simple practice, but many people have little understanding of how their money is spent on a monthly basis. And for high net worth individuals, tracking their spending can be even more challenging, because their money may be held in numerous locations.

No matter what your financial situation may be, nothing will have more of a long-term impact on your financial health than your spending habits – because spending is one of the only variables you can control.

When you or your financial advisor analyze your spending in 2017, look for any areas that “surprise” you; it is often these items floating beneath the surface where the biggest opportunities can be found. To assist you in tracking your spending, you may consider using one of the many online tools out there, at little or no cost, which help individuals manage their personal budget, such as Mint or Quicken – corralling spending now can make a big difference in the future.

Do not put off making important financial decisions

Through our experience working with high net worth individuals and families of wealth, we have found that people put their personal finances on the back-burner far too often. For example, we have met a number of business owners who are more in tune with the financial health of their business than they are with their own financial health. Delaying personal financial decisions is a pesky habit, but one that can be corrected with a little organization and attention to detail.

Before January 1 hits, take an hour to write down questions that you need answered in the new year. Some common questions we ask many of our newer clients are:

  • When is the last time you thoroughly reviewed your estate documents?
  • Do you have the right portfolio allocation?
  • Have your financial goals changed in the last year?

Form these questions into a check list, and set a due date for yourself to answer them. Repeating this process each year will have a positive impact on your personal financial outlook. As always, consider consulting a trusted financial advisor to assist you with any of these tasks.

Do you need additional financial support in the new year? Feel free to contact us today for more information about our service offerings.

Michael Krol, CFP®, CPA

Partner and Head of Wealth Advisory

Barron's
Advisor
Hall of
Fame